FYC vs ILCG

FYCCFirst Trust Small Cap Growth AlphaDEX Fund

ILCGAiShares Morningstar Growth ETF

In short

FYC Small-cap growth, but not by market cap. The AlphaDEX screen ranks the Nasdaq US 700 Small Cap universe on growth and value factors, keeps the best scorers, tiers their weights by rank, and reshuffles quarterly. Rules-based stock picking, not index hugging.

ILCG Growth by Morningstar's rulebook. A 2004-vintage iShares fund that screens large and mid caps for above-average earnings, sales, cash-flow and book-value growth, and charges four basis points to do it.

Stated mandate

FYC The fund seeks to track, before fees and expenses, the price and yield performance of the Nasdaq AlphaDEX Small Cap Growth Index through an indexing approach.

ILCG The fund aims to follow an index of U.S. large- and mid-cap stocks chosen for above-average earnings, sales, cash-flow, and book-value growth.

Why people hold it

• FYC Weight follows score, not size: selected names are split into quintiles, higher-scoring quintiles get the bigger share of the index, and stocks sit equal-weighted inside each quintile.sec.gov
• The screen blends both sides of the style aisle, ranking on growth factors (3-, 6- and 12-month price moves, sales-to-price, sales growth) and value factors (book-to-price, cash-flow-to-price, return on assets).sec.gov
• The index is reconstituted and rebalanced quarterly, so the roughly 300 small caps it holds get re-scored four times a year instead of riding a static list.sec.gov
• Live since 2011 and now a multi-billion-dollar fund, meaning this methodology has been run through more than one small-cap boom and bust rather than back-tested through them.

• ILCG 0.04% a year. The typical fund in its factor peer group charges roughly eight times that, so almost none of the return leaks out the fee door.
• Uses Morningstar's growth definition (earnings, sales, cash flow, book value) rather than S&P's or Russell's, and reaches into mid caps, not just the S&P 500.ishares.com
• Trading since 2004, a multi-billion-dollar fund holding roughly 300 stocks. Long-running plumbing, not a launch-week experiment.
• Tracking has been tight, and the fund sits in the upper half of its factor cohort overall, with cost doing much of the heavy lifting.

Worth knowing

• FYC Cost is the headline trade-off: 0.70% a year, well above the typical fund in its growth peer group, where cap-weighted options like SPYG, SCHG and VUG run at or below 0.04%.
• The prospectus flags that the quarterly reconstitution schedule may produce a higher rate of portfolio turnover, with the trading costs and in-fund capital gains that can come with it.sec.gov
• Because weights ignore market cap, the fund can concentrate in an industry group when its index does, and it trades only moderately, so spreads deserve a look before you place an order.sec.gov

• ILCG Pure growth means no value ballast, and the ride has been bumpier than most funds in its factor group. The style can sit out of favor for long stretches.
• Concentration runs high for the cohort: cap-weighted growth screens funnel a big share of the fund into the same handful of mega-cap names.
• Moderately traded, not a tape leader. Sibling IUSG applies S&P's growth definition at the same 0.04%, so the pick is which index rulebook you prefer.

Full FYC profile⁠

Full ILCG profile⁠