Better Buy: How Small-Cap ETFs ISCG and IJT Compare on Fees, Risk, and Income

The Motley Fool

by newsfeedback@fool.com (Katie Brockman)

February 23, 2026

AI-Generated Deep Dive Summary

The article compares two small-cap ETFs—iShares S&P Small-Cap 600 Growth ETF (IJT) and iShares Morningstar Small-Cap Growth ETF (ISCG)—highlighting key differences in fees, risk, diversification, and income. While both ETFs focus on growth-oriented small-cap U.S. stocks, their strategies diverge in terms of cost efficiency, portfolio composition, and trading characteristics. Investors seeking to optimize returns while managing risks need to weigh these factors carefully when choosing between the two. One key distinction is expense ratio: ISCG has a lower annual fee (0.25%) compared to IJT (0.43%). This makes ISCG more cost-effective for long-term investors. However, IJT offers greater diversification with over 600 stocks, whereas ISCG holds fewer, more carefully selected positions. This difference in portfolio size impacts both risk and potential returns—IJT may offer a broader exposure but could also experience higher volatility. The article also examines beta, which measures volatility relative to the S&P 500. Both ETFs have similar betas, indicating comparable risk levels compared to the market benchmark. Over the past year, ISCG delivered a modest edge in returns (around 12%) compared to IJT’s 9%. This performance difference aligns with ISCG’s focus on high-quality growth stocks and its lower expense ratio. For income seekers, both ETFs offer dividend yields of approximately 0.7%, though ISCG has historically paid slightly higher dividends. Investors prioritizing cost efficiency may lean toward ISCG, while those valuing broader diversification might prefer IJT despite its higher fees. This comparison underscores the importance of aligning investment goals with ETF characteristics. For growth-focused investors, understanding trade-offs between cost, risk, and diversification can help optimize portfolio outcomes.

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Originally published on The Motley Fool on 2/23/2026