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ETF Specialist

A Razor-Thin Fee Gives This Growth ETF an Edge

This compelling exchange-traded fund has a new benchmark and price tag.

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 IShares Core S&P U.S. Growth ETF (IUSG) is one of the lowest-cost funds in the large-growth Morningstar Category, giving it a sizable cost advantage against most of its peers. The fund's broad market-cap-weighted portfolio effectively diversifies risk, accurately represents its target market, and promotes low turnover. These traits further enhance the fund's appeal, supporting a Morningstar Analyst Rating of Silver.

In January 2017, BlackRock switched the fund's benchmark to the S&P 900 Growth Index from the Russell 3000 Growth Index, which effectively removed its small-cap holdings. This change was motivated by client requests to carve out small caps and BlackRock's desire to align the fund with the broader suite of iShares "core" branded U.S. equity products, which use S&P indexes. Along with this change, BlackRock cut the fund's fee to 0.05% from 0.07% and absorbed the resulting trading costs.

Alex Bryan has a position in the following securities mentioned above: MTUM. Find out about Morningstar’s editorial policies.