Should iShares Russell 2000 ETF (IWM) Be on Your Investing Radar?

Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares Russell 2000 ETF (IWM) is a passively managed exchange traded fund launched on 05/22/2000.The fund is sponsored by Blackrock. It has amassed assets over $63.66 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.Why Small Cap BlendSmall cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.CostsWhen 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 0.19%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 1.26%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Financials sector--about 18.80% of the portfolio. Industrials and Healthcare round out the top three.Looking at individual holdings, Sprouts Farmers Market Inc (SFM) accounts for about 0.59% of total assets, followed by Insmed Inc (INSM) and Ftai Aviation Ltd (FTAI).The top 10 holdings account for about 4.04% of total assets under management.Performance and RiskIWM 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 -8.99% so far this year and is down about -0.62% in the last one year (as of 03/13/2025). In the past 52-week period, it has traded between $192.84 and $242.40.The ETF has a beta of 1.18 and standard deviation of 22.43% for the trailing three-year period, making it a medium risk choice in the space. With about 1971 holdings, it effectively diversifies company-specific risk.AlternativesIShares 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 outstanding 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 $59.21 billion in assets, iShares Core S&P Small-Cap ETF has $78.57 billion. VB has an expense ratio of 0.05% and IJR charges 0.06%.Bottom-LinePassively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares Russell 2000 ETF (IWM): ETF Research Reports Insmed, Inc. (INSM): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report FTAI Aviation Ltd. (FTAI): Free Stock Analysis Report iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports Vanguard Small-Cap ETF (VB): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks