The iShares Morningstar Mid-Cap Growth ETF (IMCG) was launched on 06/28/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $2.54 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
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. Thus, companies that fall under this category provide a stable and growth-heavy investment.
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. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial 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 the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.79%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 22.10% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Arthur J Gallagher (AJG) accounts for about 1.47% of total assets, followed by Doordash Inc Class A (DASH) and Fortinet Inc (FTNT).
The top 10 holdings account for about 11.34% 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 lost about -3.43% so far this year and was up about 5.55% in the last one year (as of 04/03/2025). In the past 52-week period, it has traded between $65.15 and $81.45.
The ETF has a beta of 1.14 and standard deviation of 19.98% 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 $15.17 billion in assets, iShares Russell Mid-Cap Growth ETF has $17.03 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.
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iShares Morningstar Mid-Cap Growth ETF (IMCG): ETF Research Reports Arthur J. Gallagher & Co. (AJG): Free Stock Analysis Report Fortinet, Inc. (FTNT): Free Stock Analysis Report iShares Russell Mid-Cap Growth ETF (IWP): ETF Research Reports Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports DoorDash, Inc. (DASH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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