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

Launched on 07/24/2000, the iShares Russell 2000 Growth ETF (IWO) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Growth segment of the US equity market.The fund is sponsored by Blackrock. It has amassed assets over $12.84 billion, making it one of the largest ETFs attempting to match the Small Cap Growth segment of the US equity market.Why Small Cap GrowthSmall cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.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. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.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 0.24%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 0.78%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 24.30% of the portfolio. Industrials and Information Technology round out the top three.Looking at individual holdings, Ftai Aviation Ltd (FTAI) accounts for about 1.06% of total assets, followed by Sprouts Farmers Market Inc (SFM) and Insmed Inc (INSM).The top 10 holdings account for about 7.5% of total assets under management.Performance and RiskIWO seeks to match the performance of the Russell 2000 Growth Index before fees and expenses. The Russell 2000 Growth Index measures the performance of the small-capitalization growth sector of the U.S. equity market. It is a subset of the Russell 2000 Index, which measures the performance of the small-capitalization sector of the U.S. equity market & approximately 51% of the total market value of the Russell 2000 Index.The ETF return is roughly 2.90% so far this year and was up about 18.34% in the last one year (as of 01/30/2025). In the past 52-week period, it has traded between $244.37 and $315.36.The ETF has a beta of 1.17 and standard deviation of 24.51% for the trailing three-year period, making it a high risk choice in the space. With about 1124 holdings, it effectively diversifies company-specific risk.AlternativesIShares Russell 2000 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, IWO is a sufficient 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 S&P Small-Cap 600 Growth ETF (IJT) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares S&P Small-Cap 600 Growth ETF has $6.67 billion in assets, Vanguard Small-Cap Growth ETF has $20.29 billion. IJT has an expense ratio of 0.18% and VBK charges 0.07%.Bottom-LineAn 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.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 Growth ETF (IWO): ETF Research Reports Insmed, Inc. (INSM): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report iShares S&P Small-Cap 600 Growth ETF (IJT): ETF Research Reports FTAI Aviation Ltd. (FTAI): Free Stock Analysis Report Vanguard Small-Cap Growth ETF (VBK): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks