The pursuit of profit, one might observe, is rarely elegant. However, even in the vulgar world of finance, a discerning eye can distinguish between mere speculation and a properly curated portfolio. Today, we shall examine two small-cap ETFs – the iShares S&P Small-Cap 600 Growth (IJT) and the iShares Morningstar Small-Cap Growth (ISCG) – and determine which, if either, possesses a modicum of style. Both, it seems, aspire to capture the vivacity of smaller American enterprises, though their methods, and indeed, their successes, differ considerably.
One must always remember that a lower price does not necessarily equate to a superior value. Though, as a general rule, it is certainly more agreeable to the pocketbook. Let us, therefore, consider the figures.
| Metric | IJT | ISCG |
|---|---|---|
| Issuer | iShares | iShares |
| Expense ratio | 0.18% | 0.06% |
| 1-yr return (as of Jan. 23, 2026) | 6.47% | 14.54% |
| Dividend yield | 0.91% | 0.61% |
| Beta (5Y Monthly) | 1.18 | 1.36 |
| AUM | $6 billion | $808 million |
Observe, if you will, the charming contrast. ISCG, with its considerably lower expense ratio, offers a certain austerity that appeals to the pragmatist. A penny saved, as the proverb goes, is a penny earned, though whether it is worth the sacrifice of potential returns is a question for the truly sophisticated investor. IJT, on the other hand, offers a more generous dividend yield, a fleeting pleasure, perhaps, but one that most investors will readily embrace. The larger AUM of IJT suggests a certain popularity, though popularity, as any artist will tell you, is rarely a sign of quality.
Let us delve into the composition of these funds. ISCG, with its broader diversification across 971 stocks, resembles a lavishly appointed salon – crowded, perhaps, but undeniably vibrant. Its sectoral weights – 23% industrials, 20% technology, and 17% healthcare – are, if not particularly imaginative, at least reasonably balanced. IJT, by contrast, holds a mere 348 stocks, a more selective gathering, one might say. Its emphasis on technology – around 20% of assets – suggests a certain boldness, a willingness to embrace the future, even if that future proves to be somewhat unreliable.
Both funds, thankfully, abstain from the vulgar practice of leverage. One prefers one’s investments to be built on solid ground, not on the shifting sands of borrowed money. Both also avoid the complexities of currency hedging, a sensible precaution for those who value simplicity. It is, after all, far more elegant to understand one’s investments than to be perpetually baffled by them.
What, then, does all this signify for the discerning investor? ISCG, with its higher beta and deeper drawdown, is clearly the more adventurous option. It has, admittedly, outperformed IJT in the past year, but at what cost? Volatility, my dear reader, is a tiresome companion. IJT, with its lower risk profile and more stable returns, is better suited for those who prefer a more tranquil existence. It may not offer the thrill of the chase, but it will, at least, allow one to sleep soundly at night.
The difference in expense ratios, while seemingly trivial, is not to be dismissed entirely. A mere 0.12% difference may seem insignificant, but over time, it can accumulate to a considerable sum. It is, as any meticulous housekeeper will tell you, the small details that truly matter.
In conclusion, both IJT and ISCG offer a passable means of participating in the growth of small-cap companies. However, the choice between them ultimately depends on one’s temperament and one’s tolerance for risk. For the adventurous soul, ISCG may offer a fleeting moment of excitement. But for the discerning investor, who values elegance and stability, IJT is, perhaps, the more appropriate choice. After all, a well-curated portfolio, like a well-lived life, is not about chasing the highest returns, but about finding a harmonious balance between risk and reward.
Let us now define a few terms for those who find themselves adrift in the sea of financial jargon:
ETF: Exchange-traded fund that holds a basket of securities and trades on an exchange like a stock.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
Dividend yield: Annual dividends paid by a fund divided by its current share price, shown as a percentage.
Beta: Measure of a fund’s volatility compared with the overall market, typically the S&P 500 index.
AUM: Assets under management; the total market value of all assets held by the fund.
Max drawdown: The largest peak-to-trough decline in a fund’s value over a specified period.
Growth of $1,000: Illustration showing how a $1,000 investment would have changed in value over time.
Total return: Investment performance including price changes plus all dividends and distributions, assuming they are reinvested.
Small-cap: Companies with relatively small stock market values, typically a few hundred million to a few billion dollars.
Growth stocks: Companies expected to grow earnings or revenues faster than the overall market, often reinvesting profits instead of paying dividends.
Sector weights: The percentage of a fund’s assets invested in each industry sector, such as technology or industrials.
Leverage: Use of borrowed money or derivatives to amplify a fund’s exposure and potential returns or losses.
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2026-02-23 18:32