The iShares Morningstar Small-Cap ETF (ISCB) was launched on June 28, 2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $286.71 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.26%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector -- about 17.6% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Atlassian Corp Class A (TEAM) accounts for about 0.39% of total assets, followed by Blk Csh Fnd Treasury Sl Agency (XTSLA) and Okta Class A (OKTA).
The top 10 holdings account for about 3.11% of total assets under management.
Performance and Risk
ISCB seeks to match the performance of the MORNINGSTAR US SMALL CAP EXTENDED INDEX before fees and expenses. The Morningstar US Small Cap Extended Index comprises of small-capitalization U.S. equities.
The ETF has added roughly 16.7% so far this year and it's up approximately 20.51% in the last one year (as of 09/08/2026). In the past 52-week period, it has traded between $60.51 and $77.14.
The ETF has a beta of 1.05 and standard deviation of 19.2% for the trailing three-year period. With about 1580 holdings, it effectively diversifies company-specific risk.
Alternatives
iShares Morningstar Small-Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ISCB is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Morningstar Small-Cap ETF (VB) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While Vanguard Morningstar Small-Cap ETF has $81.00 billion in assets, iShares Core S&P Small-Cap ETF has $109.70 billion. VB has an expense ratio of 0.03% and IJR charges 0.06%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
iShares Morningstar Small-Cap ETF (ISCB): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).