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Should iShares Russell 2000 ETF (IWM) Be on Your Investing Radar?
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The iShares Russell 2000 ETF (IWM - Free Report) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $46.99 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.19%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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 Industrials sector--about 17.10% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Super Micro Computer Inc (SMCI - Free Report) accounts for about 0.61% of total assets, followed by Blk Csh Fnd Treasury Sl Agency (XTSLA) and Chord Energy Corp (CHRD - Free Report) .
The top 10 holdings account for about 3.47% of total assets under management.
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 has lost about -4.22% so far this year and is down about -2.82% in the last one year (as of 10/24/2023). In the past 52-week period, it has traded between $165.03 and $198.71.
The ETF has a beta of 1.16 and standard deviation of 23.51% for the trailing three-year period, making it a medium risk choice in the space. With about 1993 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell 2000 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, IWM is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $41.15 billion in assets, iShares Core S&P Small-Cap ETF has $62.41 billion. VB has an expense ratio of 0.05% and IJR charges 0.06%.
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 Russell 2000 ETF (IWM) Be on Your Investing Radar?
The iShares Russell 2000 ETF (IWM - Free Report) was launched on 05/22/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $46.99 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.19%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.70%.
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 Industrials sector--about 17.10% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Super Micro Computer Inc (SMCI - Free Report) accounts for about 0.61% of total assets, followed by Blk Csh Fnd Treasury Sl Agency (XTSLA) and Chord Energy Corp (CHRD - Free Report) .
The top 10 holdings account for about 3.47% of total assets under management.
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 has lost about -4.22% so far this year and is down about -2.82% in the last one year (as of 10/24/2023). In the past 52-week period, it has traded between $165.03 and $198.71.
The ETF has a beta of 1.16 and standard deviation of 23.51% for the trailing three-year period, making it a medium risk choice in the space. With about 1993 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell 2000 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, IWM is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $41.15 billion in assets, iShares Core S&P Small-Cap ETF has $62.41 billion. VB has an expense ratio of 0.05% and IJR charges 0.06%.
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.