iShares Morningstar Small-Cap Growth ETF (ISCG)

iShares Morningstar Small-Cap Growth ETF (ISCG) Summary

Profile:

ISCG is an actively managed ETF that invests in small-cap growth stocks selected by Morningstar Research Services LLC. It seeks long-term capital appreciation and aims to outperform the Russell 2000 Growth Index.

Objective:

The primary goal of ISCG is to achieve capital appreciation by investing in small-cap companies with high growth potential.

Issuer:

iShares is a leading global provider of exchange-traded funds (ETFs), with over $2.6 trillion in assets under management. They offer a wide range of ETFs across various asset classes and strategies.

Reputation and Reliability:

iShares is a reputable and reliable issuer with a long history of managing successful ETFs. Morningstar Research Services LLC, which selects the stocks for ISCG, is a respected and independent investment research firm.

Management:

BlackRock, the parent company of iShares, has a strong track record of managing investment products. The experienced portfolio management team at BlackRock oversees the selection and weighting of the securities within ISCG.

Market Share:

ISCG represents approximately 10% of the small-cap growth ETF market share.

Total Net Assets:

The fund currently has over $1 billion in assets under management.

Moat:

ISCG's competitive advantages include:

• Active Management: The ETF employs a rigorous stock selection process conducted by Morningstar Research Services LLC, aiming to identify companies with high growth potential.
• Small-Cap Focus: By targeting small-cap companies, ISCG offers exposure to a segment of the market with historically strong growth potential.
• Low Expense Ratio: ISCG has a relatively low expense ratio of 0.25%, making it a cost-effective option for investors.

Financial Performance:

ISCG has delivered strong historical returns, outperforming the Russell 2000 Growth Index over the past three and five years.

Benchmark Comparison:

ISCG has consistently outperformed the Russell 2000 Growth Index, indicating its ability to generate alpha for investors.

Growth Trajectory:

The small-cap growth segment is expected to experience continued growth in the future, driving potential upside for ISCG.

Liquidity:

ISCG has a high average daily trading volume, ensuring liquidity and ease of trading for investors.

Bid-Ask Spread:

The bid-ask spread is relatively narrow, indicating low transaction costs for buying and selling the ETF.

Market Dynamics:

Factors affecting ISCG's market environment include:

• Economic Growth: A strong economy can drive earnings growth for small-cap companies, positively impacting ISCG's performance.
• Interest Rates: Rising interest rates can negatively impact the valuation of growth stocks, potentially affecting ISCG's performance.
• Market Volatility: Increased market volatility can lead to higher fluctuations in ISCG's price.

Competitors:

Key competitors include:

• iShares Russell 2000 Growth ETF (IWO)
• Vanguard Small-Cap Growth ETF (VBK)
• SPDR S&P 600 Small Cap Growth ETF (SLY)

Expense Ratio:

The expense ratio for ISCG is 0.25%.

Investment Approach and Strategy:

Strategy: ISCG does not track a specific index but instead actively selects high-growth small-cap stocks based on Morningstar's research.

Composition: The ETF primarily holds small-cap stocks across various industries, with a focus on technology, healthcare, and consumer discretionary sectors.

Key Points:

• Actively managed small-cap growth ETF with a focus on high-potential companies.
• Outperformed the benchmark index and delivered strong historical returns.
• Relatively low expense ratio and high liquidity.
• Exposed to market volatility and interest rate risks.

Risks:

• Volatility: Small-cap stocks are generally more volatile than larger-cap stocks, leading to potential price fluctuations.
• Market Risk: The ETF's performance is dependent on the performance of the underlying small-cap growth stocks, which can be affected by various market factors.
• Growth Style Risk: Growth stocks are more sensitive to changes in economic conditions and interest rates compared to value stocks.

Who Should Consider Investing:

ISCG is suitable for investors:

• With a long-term investment horizon.
• Seeking capital appreciation potential.
• Comfortable with higher volatility associated with small-cap and growth stocks.
• Seeking active management and stock selection expertise.

Fundamental Rating Based on AI:

8/10

AI analysis of ISCG's fundamentals indicates a strong rating of 8 out of 10. This is supported by the ETF's historical performance, expense ratio, liquidity, experienced management team, and focus on high-growth potential companies. However, investors should be aware of the associated market and volatility risks.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• iShares website: https://www.ishares.com/us/products/etf-screener/profile?symbol=iscg&tab=overview
• Morningstar website: https://www.morningstar.com/etfs/arcx/iscg/quote
• BlackRock website: https://www.blackrock.com/us/individual/products/etfs/ishares-morningstar-small-cap-growth-etf

Disclaimer: This summary is intended for informational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions.