The market, like a restless field, offers its yields to those who know where to look. Two funds, the State Street SPDR S&P 600 Small Cap Growth ETF (SLYG) and the iShares Morningstar Small-Cap Growth ETF (ISCG), both promise a share of that harvest, though they go about it with different hands. One, the more seasoned hand, asks a steeper price for the privilege. The other, a leaner operation, offers a bit more for a little less, but carries its own set of risks, like a field prone to sudden storms.
Both funds cast their nets for the small-cap growth stocks – those young shoots reaching for the sun – but each chooses a different patch of ground. The question for the investor isn’t simply which will grow faster, but which aligns with their own tolerance for the lean years, and their belief in the strength of the soil.
A Quick Look at the Ledger
| Metric | SLYG | ISCG |
|---|---|---|
| Issuer | SPDR | iShares |
| Expense Ratio | 0.15% | 0.06% |
| 1-yr Return (as of 1/9/2026) | 8.96% | 18.02% |
| Dividend Yield | 0.86% | 0.61% |
| AUM | $3.6 billion | $807.86 million |
ISCG, the leaner of the two, asks for less each year in management fees – a small mercy in a world where every penny counts. SLYG, while a bit more demanding upfront, does offer a slightly richer dividend – a small, regular comfort. For some, the lower cost of ISCG will be the deciding factor, a quiet satisfaction in knowing they’ve kept more of what they’ve earned. Others will be drawn to the small, steady income offered by SLYG, a little something to ease the worry of a downturn.
The Shape of Things: Risk and Return
| Metric | SLYG | ISCG |
|---|---|---|
| Max Drawdown (5 yr) | -29.17% | -41.49% |
| Growth of $1,000 over 5 years | $1,210 | $1,095 |
The numbers tell a story, but they don’t tell the whole story. Over five years, SLYG has yielded a bit more for every dollar invested. But ISCG, while returning less overall, has weathered the storms with a bit more resilience, its maximum drawdown less severe. It’s a difference that might not be apparent on a chart, but it can be the difference between holding on and letting go when the winds blow hard.
What Lies Within
ISCG casts a wider net, holding 971 small-cap growth stocks. It’s a broad church, with a strong leaning toward industrial companies (26%), followed by technology (18%) and healthcare (17%). Its largest holdings – Lumentum Holdings, Kratos Defense and Security Solutions, and ATI – each represent a small piece of the whole, a testament to its diversification. It’s a fund built on the idea that a multitude of small gains can outweigh the risk of a single, large loss.
SLYG, by contrast, holds a more concentrated portfolio of 334 stocks, with a similar emphasis on industrials (20.5%), technology (19%), and healthcare (16%). Its top positions – TTM Technologies, Advanced Energy Industries, and Sanmina – carry more weight, a reflection of its belief in the power of focused investment. It’s a fund built on the idea that a few strong gains can outweigh the risk of a concentrated portfolio.
For those seeking further guidance in navigating these fields, there are maps and guides available, but ultimately, the choice is yours.
What This Means for the Investor
Investing in small-cap ETFs is a way to sow seeds in a field that, while often turbulent, offers the potential for significant growth. These companies, though smaller, are often more nimble, more innovative, and more willing to take risks. But with that potential comes increased volatility – a reminder that the market is a fickle mistress.
In this comparison, ISCG stands out for its broader reach and lower cost, while SLYG offers a slightly higher yield and a more focused approach. The choice between the two isn’t about finding the “best” fund, but about finding the fund that best aligns with your own risk tolerance, your investment goals, and your belief in the future.
Those who value a steady income may be drawn to SLYG, while those who prioritize cost and diversification may prefer ISCG. But ultimately, the most important thing is to understand the risks and rewards of each fund, and to make an informed decision based on your own circumstances.
A Few Words to the Wise
ETF: An exchange-traded fund, a basket of securities traded like a stock.
Expense Ratio: The annual fee paid to manage the fund.
Dividend Yield: The annual dividend paid by the fund, divided by its share price.
Beta: A measure of the fund’s volatility compared to the overall market.
AUM: Assets Under Management, the total value of the fund’s holdings.
Max Drawdown: The largest peak-to-trough decline in the fund’s value.
Growth of $1,000: An illustration of how a $1,000 investment would have grown over time.
Small-cap: Companies with relatively small market capitalization.
Growth stocks: Companies expected to grow faster than the overall market.
Sector weighting: The percentage of the fund’s assets invested in each industry.
Holdings count: The number of individual securities in the fund’s portfolio.
Index tracking: A strategy where the fund aims to match the performance of a specific market index.
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2026-01-24 15:22