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iShares Morningstar Growth ETF

ILCG tracks a market cap-weighted index of growth stocks, selected from the top 90% of the US market-cap spectrum.

ILCG owns a portfolio of mid-cap and large-cap growth stocks. The fund has the potential to continue to outperform the broader markets. However, it may underperform other growth funds due to its higher exposure to mid-cap stocks.

ILCG: Growth Prospects Slightly Weaker Than Peers

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The Fed kicked off the new rate cycle era. Investors seeking to capitalize on this trend could invest in growth ETFs.

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iShares Morningstar Growth ETF has outperformed the broader market in recent years due to growth stock bias. Economic uncertainties and high leverage levels create a mixed environment for stocks in the short term. ILCG's high valuation multiples and volatility may make it less attractive compared to peer group growth ETFs.

ILCG: Cautious On This Growth ETF

iShares Morningstar Growth ETF holds over 300 stocks with historical and forecasted growth characteristics. Like many growth funds, the ILCG ETF is overweight in technology and in a few mega-cap companies. ILCG has outperformed the S&P 500 since its inception in 2004 and shows attractive quality metrics.

ILCG: Growth ETF Lagging Competitors

ILCG which focuses on large-cap-and-mid-cap stocks with growth characteristics has outperformed the benchmark by 700bps over the past year. Notwithstanding the recent performance, we don't feel ILCG is as competent a growth ETF as VUG, the largest offering in this space. The relative strength and standalone charts suggest that this is an overbought theme, and valuations are not cheap either.

ILCG ETF: Not Ideal

ILCG is poised to disappoint in the current high interest rate environment, driven in part by its overweight to expensive high growth Tech stocks, and a potential resurgence of Value. Active managers are better equipped to navigate the current environment relative to passive funds like ILCG. Growth-oriented investors should consider QQQ as an alternative, which has consistently outperformed ILCG with similar exposure and volatility.

ILCG: More Growth? In This Economy?

For investors seeking momentum, iShares Morningstar Growth ETF ILCG is probably on the radar. The fund just hit a 52-week high and is up 43% from its 52-week low of $50.37 per share.

Large-Cap Growth ETF (ILCG) Hits New 52-Week High

iShares Morningstar Growth ETF tracks the Morningstar US Large-Mid Cap Broad Growth Index and offers targeted access to large-cap domestic growth stocks. ILCG holds significant holdings in prominent tech companies such as Apple, Microsoft, Amazon, Nvidia, and Tesla. The fund's portfolio is heavily skewed towards the Information Technology sector, with a low expense ratio of 0.04%, making it a cost-efficient option for growth stock exposure.

ILCG: Yet Another Growth Fund In A Tired Style

ILCG is a tech-skewed ETF thanks to being subsetted to above average growth and being value-weighted within that subset. The ETF has a high concentration in tech, with more than 40% of its exposure in the sector, as well as exposure to other high brand-equity and big name stocks. The average PE ratio of the ETF is 33x, indicating high valuations, and the PE has remained stable for the top holdings despite changes in the cost of capital narrative.

ILCG: Don't Chase Tech

The iShares Morningstar Growth ETF, which focuses on large and mid-cap growth equities, has seen a strong performance in 2023. The ETF's performance is largely driven by tech mega-caps, with its portfolio showing stretched valuation metrics; it is up 26% this year, representing a midpoint between QQQ's 37% performance and VOT's 13% gain.

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The blend of robust economic recovery, continued low-interest rates, AI frenzy and strong corporate earnings led to the outperformance in 1H and will likely continue to drive the second-half performance.

News for iShares Morningstar Growth ETF ETF (ILCG)