ISCG vs. RZG: Which Small-Cap Growth ETF Fits Your Portfolio?

Core Insights - The iShares Morningstar Small-Cap Growth ETF (ISCG) is characterized by its low cost, extensive diversification, and larger assets under management compared to the Invesco S&P SmallCap 600 Pure Growth ETF (RZG), which offers a more concentrated approach with heavier sector tilts [1] Cost & Size Comparison - ISCG has an expense ratio of 0.06%, significantly lower than RZG's 0.35% [2] - As of March 13, 2026, ISCG has a one-year return of 25.9%, slightly higher than RZG's 25.2% [1] - ISCG offers a dividend yield of 0.68%, compared to RZG's 0.34% [2] - ISCG has assets under management (AUM) of $923.8 million, while RZG has $113.8 million [1] Performance & Risk Comparison - Over five years, RZG has a maximum drawdown of -38.31%, while ISCG has a drawdown of -41.50% [3] - The growth of $1,000 over five years is $1,044 for ISCG and $1,016 for RZG [3] Portfolio Composition - ISCG tracks nearly 1,000 small-cap U.S. growth stocks, with sector allocations of 25% in industrials, 21% in technology, and 16% in healthcare [4] - The top holdings in ISCG include Lumentum Holdings Inc, Ati Inc, and Rbc Bearings Inc, each making up less than 2% of assets, indicating a highly diversified portfolio [4] - RZG holds about 130 stocks, with larger allocations in healthcare (24%) and technology (19%) [5] - Major positions in RZG include ACM Research Inc, Clear Secure Inc, and Powell Industries Inc, each around 1.5% of the portfolio [5] Implications for Investors - The cost difference between ISCG and RZG is significant, with ISCG's lower expense ratio likely leading to better long-term performance due to lower cost drag [6] - ISCG's larger AUM facilitates tighter spreads and easier trading for investors [6] - RZG's concentrated approach may appeal to those seeking targeted growth, but both funds have underperformed the S&P 500 over the last five years [7]