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Should iShares Russell 2000 ETF (IWM) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares Russell 2000 ETF (IWM - Free Report) is a passively managed exchange traded fund launched on 05/22/2000.
The fund is sponsored by Blackrock. It has amassed assets over $55.38 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 0.19%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.35%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 16.70% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Halozyme Therapeutics Inc (HALO - Free Report) accounts for about 0.32% of total assets, followed by Emcor Group Inc (EME - Free Report) and Inspire Medical Systems Inc (INSP - Free Report) .
Performance and Risk
IWM seeks to match the performance of the Russell 2000 Index before fees and expenses. The Russell 2000 Index measures the performance of the small capitalization sector of the U.S. equity market.
The ETF return is roughly 9.82% so far this year and is down about -3.57% in the last one year (as of 02/01/2023). In the past 52-week period, it has traded between $163.90 and $211.71.
The ETF has a beta of 1.14 and standard deviation of 31.20% for the trailing three-year period, making it a medium risk choice in the space. With about 1959 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell 2000 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, IWM is a good 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 Small-Cap ETF (VB - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While Vanguard Small-Cap ETF has $44.71 billion in assets, iShares Core S&P Small-Cap ETF has $71.22 billion. VB has an expense ratio of 0.05% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 Russell 2000 ETF (IWM) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares Russell 2000 ETF (IWM - Free Report) is a passively managed exchange traded fund launched on 05/22/2000.
The fund is sponsored by Blackrock. It has amassed assets over $55.38 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 0.19%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.35%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 16.70% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Halozyme Therapeutics Inc (HALO - Free Report) accounts for about 0.32% of total assets, followed by Emcor Group Inc (EME - Free Report) and Inspire Medical Systems Inc (INSP - Free Report) .
Performance and Risk
IWM seeks to match the performance of the Russell 2000 Index before fees and expenses. The Russell 2000 Index measures the performance of the small capitalization sector of the U.S. equity market.
The ETF return is roughly 9.82% so far this year and is down about -3.57% in the last one year (as of 02/01/2023). In the past 52-week period, it has traded between $163.90 and $211.71.
The ETF has a beta of 1.14 and standard deviation of 31.20% for the trailing three-year period, making it a medium risk choice in the space. With about 1959 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell 2000 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, IWM is a good 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 Small-Cap ETF (VB - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While Vanguard Small-Cap ETF has $44.71 billion in assets, iShares Core S&P Small-Cap ETF has $71.22 billion. VB has an expense ratio of 0.05% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.