Should iShares Morningstar Mid-Cap Growth ETF (IMCG) Be on Your Investing Radar?

The iShares Morningstar Mid-Cap Growth ETF (IMCG) was launched on June 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 $4.11 billion, making it one of the larger 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. Thus they have a nice balance of growth potential and stability.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Further, growth stocks have a higher level of volatility associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.

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 one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.61%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 24.1% of the portfolio. Information Technology and Financials round out the top three.

Looking at individual holdings, Fortinet Inc (FTNT) accounts for about 1.31% of total assets, followed by Cummins Inc (CMI) and Freeport Mcmoran Inc (FCX).

The top 10 holdings account for about 11.65% 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 return is roughly 23.23% so far this year and was up about 22.16% in the last one year (as of 08/20/2026). In the past 52-week period, it has traded between $76.01 and $100.54.

The ETF has a beta of 1.13 and standard deviation of 17.34% for the trailing three-year period. With about 265 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 outstanding 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 Morningstar Mid-Cap Growth ETF (VOT) and the iShares Russell Mid-Cap Growth ETF (IWP) track a similar index. While Vanguard Morningstar Mid-Cap Growth ETF has $19.77 billion in assets, iShares Russell Mid-Cap Growth ETF has $20.66 billion. VOT has an expense ratio of 0.05% and IWP charges 0.23%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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This article originally published on Zacks Investment Research (zacks.com).

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