iShares Fund Face-off: Is the Russell 2000 Growth ETF or Morningstar Small-Cap Growth ETF the Better Buy?
Key takeaways
- Small-cap growth stocks are often sought for their potential to outperform broader markets during economic expansions, though they typically carry higher volatility.
- Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns.
- Cost is a major differentiator here, as the Morningstar-indexed fund is significantly more efficient for long-term holders.
Small-cap growth stocks are often sought for their potential to outperform broader markets during economic expansions, though they typically carry higher volatility. Both i Shares' Russell 2000 Growth ETF and Morningstar Small-Cap Growth ETF provide exposure to this aggressive equity segment, yet they differ significantly in their fee structures, liquidity, and the specific indexes they use to identify growth characteristics.
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield based on the June 26 closing price.
Cost is a major differentiator here, as the Morningstar-indexed fund is significantly more efficient for long-term holders. Its 0.06% expense ratio is one-fourth the cost of the Russell 2000-based alternative. While neither fund is primarily a dedicated income play, the Morningstar fund's 0.6% yield slightly edges out the 0.4% payout of its larger counterpart.