Launched on May 22, 2000, the iShares Russell 2000 ETF (IWM Quick QuoteIWM - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.

The fund is sponsored by Blackrock. It has amassed assets over $67.24 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.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

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 1.03%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Healthcare sector -- about 18.1% of the portfolio. Financials and Industrials round out the top three.

Looking at individual holdings, Ionq Inc (IONQ) accounts for about 0.76% of total assets, followed by Credo Technology Group Holding Ltd (CRDO) and Bloom Energy Class A Corp (BE).

The top 10 holdings account for about 5.43% 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 added roughly 6.42% so far this year and is up about 2.26% in the last one year (as of 11/20/2025). In the past 52-week period, it has traded between $174.82 and $250.33.

The ETF has a beta of 1.15 and standard deviation of 21.05% for the trailing three-year period, making it a medium risk choice in the space. With about 1982 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) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While Vanguard Small-Cap ETF has $65.96 billion in assets, iShares Core S&P Small-Cap ETF has $83.10 billion. VB has an expense ratio of 0.05% and IJR charges 0.06%.

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.