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 Quick Quote 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 $6.32 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
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.63%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 20.90% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Omnicell Inc (
OMCL Quick Quote OMCL - Free Report) accounts for about 1.49% of total assets, followed by Chart Industries Inc ( GTLS Quick Quote GTLS - Free Report) and Innovative Industrial Properties I ( IIPR Quick Quote IIPR - Free Report) .
The top 10 holdings account for about 11.45% 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 gained about 23.17% so far this year and it's up approximately 21.03% in the last one year (as of 12/29/2021). In the past 52-week period, it has traded between $113.22 and $143.62.
The ETF has a beta of 1.13 and standard deviation of 29.02% for the trailing three-year period, making it a medium risk choice in the space. With about 348 holdings, it effectively diversifies company-specific risk.
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 Quick Quote IWO - Free Report) and the Vanguard SmallCap Growth ETF ( VBK Quick Quote VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $12.34 billion in assets, Vanguard SmallCap Growth ETF has $16.10 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.