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Should iShares S&P SmallCap 600 Growth ETF (IJT) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the iShares S&P SmallCap 600 Growth ETF (IJT - Free Report) is a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $6.13 billion, making it one of the larger ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.18%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.67%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 20.60% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Omnicell Inc (OMCL - Free Report) accounts for about 1.32% of total assets, followed by Saia Inc (SAIA - Free Report) and Chart Industries Inc (GTLS - Free Report) .
The top 10 holdings account for about 10.62% of total assets under management.
Performance and Risk
IJT seeks to match the performance of the S&P SmallCap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index measures the performance of the small-capitalization growth sector of the U.S. equity market.
The ETF has added about 20.15% so far this year and it's up approximately 52.31% in the last one year (as of 10/29/2021). In the past 52-week period, it has traded between $89.65 and $136.86.
The ETF has a beta of 1.17 and standard deviation of 29.27% for the trailing three-year period, making it a medium risk choice in the space. With about 352 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P SmallCap 600 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IJT is an excellent option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard SmallCap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $12.16 billion in assets, Vanguard SmallCap Growth ETF has $16.87 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
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.
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Should iShares S&P SmallCap 600 Growth ETF (IJT) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the iShares S&P SmallCap 600 Growth ETF (IJT - Free Report) is a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $6.13 billion, making it one of the larger ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.18%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.67%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 20.60% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Omnicell Inc (OMCL - Free Report) accounts for about 1.32% of total assets, followed by Saia Inc (SAIA - Free Report) and Chart Industries Inc (GTLS - Free Report) .
The top 10 holdings account for about 10.62% of total assets under management.
Performance and Risk
IJT seeks to match the performance of the S&P SmallCap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index measures the performance of the small-capitalization growth sector of the U.S. equity market.
The ETF has added about 20.15% so far this year and it's up approximately 52.31% in the last one year (as of 10/29/2021). In the past 52-week period, it has traded between $89.65 and $136.86.
The ETF has a beta of 1.17 and standard deviation of 29.27% for the trailing three-year period, making it a medium risk choice in the space. With about 352 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P SmallCap 600 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IJT is an excellent option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard SmallCap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $12.16 billion in assets, Vanguard SmallCap Growth ETF has $16.87 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
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.