We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should iShares S&P SmallCap 600 Growth ETF (IJT) Be on Your Investing Radar?
Read MoreHide Full Article
Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the iShares S&P SmallCap 600 Growth ETF (IJT - Free Report) , a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $5.36 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but 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. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial 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 0.88%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 19% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Exlservice Holdings Inc (EXLS - Free Report) accounts for about 1.28% of total assets, followed by Blk Csh Fnd Treasury Sl Agency (XTSLA) and Ufp Industries Inc (UFPI - Free Report) .
The top 10 holdings account for about 9.42% 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 lost about -17.33% so far this year and is down about -18.40% in the last one year (as of 11/11/2022). In the past 52-week period, it has traded between $100.74 and $143.33.
The ETF has a beta of 1.12 and standard deviation of 31.55% for the trailing three-year period, making it a medium risk choice in the space. With about 380 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P SmallCap 600 Growth 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, IJT is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
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 $9.68 billion in assets, Vanguard SmallCap Growth ETF has $12.32 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should iShares S&P SmallCap 600 Growth ETF (IJT) Be on Your Investing Radar?
Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the iShares S&P SmallCap 600 Growth ETF (IJT - Free Report) , a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $5.36 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but 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. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial 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 0.88%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 19% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Exlservice Holdings Inc (EXLS - Free Report) accounts for about 1.28% of total assets, followed by Blk Csh Fnd Treasury Sl Agency (XTSLA) and Ufp Industries Inc (UFPI - Free Report) .
The top 10 holdings account for about 9.42% 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 lost about -17.33% so far this year and is down about -18.40% in the last one year (as of 11/11/2022). In the past 52-week period, it has traded between $100.74 and $143.33.
The ETF has a beta of 1.12 and standard deviation of 31.55% for the trailing three-year period, making it a medium risk choice in the space. With about 380 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P SmallCap 600 Growth 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, IJT is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
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 $9.68 billion in assets, Vanguard SmallCap Growth ETF has $12.32 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.