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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 $66.82 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 1.32%.
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 Financials sector--about 16.90% of the portfolio. Industrials 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 return is roughly 18.61% so far this year and it's up approximately 18.59% in the last one year (as of 12/27/2023). In the past 52-week period, it has traded between $162.21 and $204.10.
The ETF has a beta of 1.15 and standard deviation of 23.58% 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 a great 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 $50.13 billion in assets, iShares Core S&P Small-Cap ETF has $77.87 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.
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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 $66.82 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 1.32%.
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 Financials sector--about 16.90% of the portfolio. Industrials 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 return is roughly 18.61% so far this year and it's up approximately 18.59% in the last one year (as of 12/27/2023). In the past 52-week period, it has traded between $162.21 and $204.10.
The ETF has a beta of 1.15 and standard deviation of 23.58% 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 a great 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 $50.13 billion in assets, iShares Core S&P Small-Cap ETF has $77.87 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.