ILCG - ILCG ETF: Not Ideal

2024-05-22 15:39:43 ET

Summary

• ILCG which focuses on large-cap-and-mid-cap stocks with growth characteristics has outperformed the benchmark by 700bps over the past year.
• Notwithstanding the recent performance, we don't feel ILCG is as competent a growth ETF as VUG, the largest offering in this space.
• The relative strength and standalone charts suggest that this is an overbought theme, and valuations are not cheap either.

Introduction

Growth stocks in general have enjoyed their time in the sun for a while now, and the iShares Morningstar Growth ETF ( ILCG ) is one of many ETF products that offers diversified exposure to some of the most prominent large-and-mid-cap stocks from this hot terrain. Note that over the past year, ILCG has done very well, generating returns of 36% and outperforming the S&P 500 by roughly 700bps....

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