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Should iShares S&P SmallCap 600 Growth ETF (IJT) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Growth segment of the US equity market, look no further than 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 $5.54 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. Further, growth stocks have a higher level of volatility 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.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.92%.
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 Information Technology sector--about 18% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Omnicell Inc (OMCL - Free Report) accounts for about 1.30% of total assets, followed by Southwestern Energy (SWN - Free Report) and Exlservice Holdings Inc (EXLS - Free Report) .
The top 10 holdings account for about 11.35% 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 -20.90% so far this year and is down about -18.92% in the last one year (as of 09/05/2022). In the past 52-week period, it has traded between $101.11 and $143.62.
The ETF has a beta of 1.13 and standard deviation of 30.73% for the trailing three-year period, making it a medium risk choice in the space. With about 370 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 reasonable 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 $9.29 billion in assets, Vanguard SmallCap Growth ETF has $12.24 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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?
If you're interested in broad exposure to the Small Cap Growth segment of the US equity market, look no further than 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 $5.54 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. Further, growth stocks have a higher level of volatility 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.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.92%.
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 Information Technology sector--about 18% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Omnicell Inc (OMCL - Free Report) accounts for about 1.30% of total assets, followed by Southwestern Energy (SWN - Free Report) and Exlservice Holdings Inc (EXLS - Free Report) .
The top 10 holdings account for about 11.35% 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 -20.90% so far this year and is down about -18.92% in the last one year (as of 09/05/2022). In the past 52-week period, it has traded between $101.11 and $143.62.
The ETF has a beta of 1.13 and standard deviation of 30.73% for the trailing three-year period, making it a medium risk choice in the space. With about 370 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 reasonable 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 $9.29 billion in assets, Vanguard SmallCap Growth ETF has $12.24 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.