If you're interested in broad exposure to the Mid Cap Growth segment of the US equity market, look no further than the iShares Morningstar Mid-Cap Growth ETF (IMCG), a passively managed exchange traded fund launched on 06/28/2004.
The fund is sponsored by Blackrock. It has amassed assets over $2.65 billion, making it one of the average sized ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.06%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.74%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 22.60% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Applovin Corp Class A (APP) accounts for about 1.23% of total assets, followed by Arthur J Gallagher (AJG) and Autodesk Inc (ADSK).
The top 10 holdings account for about 10.52% of total assets under management.
Performance and Risk
IMCG seeks to match the performance of the MORNINGSTAR US MID CAP BROAD GROWTH INDX before fees and expenses. The Morningstar US Mid Cap Broad Growth Index comprises of mid-capitalization U.S. equities that exhibit growth characteristics.
The ETF has gained about 5.36% so far this year and is up roughly 25.28% in the last one year (as of 01/27/2025). In the past 52-week period, it has traded between $63.94 and $81.45.
The ETF has a beta of 1.10 and standard deviation of 20.77% for the trailing three-year period. With about 300 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar Mid-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, IMCG is an excellent option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT) and the iShares Russell Mid-Cap Growth ETF (IWP) track a similar index. While Vanguard Mid-Cap Growth ETF has $16.26 billion in assets, iShares Russell Mid-Cap Growth ETF has $18.63 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.
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Get it free >>iShares Morningstar Mid-Cap Growth ETF (IMCG): ETF Research Reports
Autodesk, Inc. (ADSK) : Free Stock Analysis Report
Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report
AppLovin Corporation (APP) : Free Stock Analysis Report
iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports
Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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