Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the iShares Morningstar Small-Cap Growth ETF (ISCG Quick QuoteISCG - Free Report) is a passively managed exchange traded fund launched on June 28, 2004.

The fund is sponsored by Blackrock. It has amassed assets over $970.81 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.

Why Small Cap Growth

With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.65%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 23.8% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Okta Class A (OKTA) accounts for about 1.17% of total assets, followed by Atlassian Corp Class A (TEAM) and Guardant Health (GH).

The top 10 holdings account for about 6.91% of total assets under management.

Performance and Risk

ISCG seeks to match the performance of the MORNINGSTAR US SML CP BRD GRWTH EXTD ID before fees and expenses. The Morningstar US Small Cap Broad Growth Extended Index comprises of small-capitalization U.S. equities that exhibit growth characteristics.

The ETF has added roughly 12.34% so far this year and it's up approximately 11.67% in the last one year (as of 10/29/2026). In the past 52-week period, it has traded between $51.70 and $66.36.

The ETF has a beta of 1.14 and standard deviation of 20.01% for the trailing three-year period. With about 926 holdings, it effectively diversifies company-specific risk.

Alternatives

iShares Morningstar Small-Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ISCG is an outstanding option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Morningstar Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $14.02 billion in assets, Vanguard Morningstar Small-Cap Growth ETF has $22.65 billion. IWO has an expense ratio of 0.24% and VBK charges 0.05%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.