Yahoo Finance Should iShares Core S&P Small-Cap ETF (IJR) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the iShares Core S&P Small-Cap ETF (IJR), a passively managed exchange traded fund launched on 05/22/2000.
The fund is sponsored by Blackrock. It has amassed assets over $68.44 billion, making it the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with 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
When 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 0.06%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.85%.
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 17.70% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Blk Csh Fnd Treasury Sl Agency (XTSLA) accounts for about 2.04% of total assets, followed by Applied Industrial Technologies In (AIT) and Sps Commerce Inc (SPSC).
The top 10 holdings account for about 7.09% of total assets under management.
Performance and Risk
IJR seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index measures the performance of the small capitalization sector of the U.S. equity market.
The ETF has gained about 6.18% so far this year and is down about -2.03% in the last one year (as of 06/08/2023). In the past 52-week period, it has traded between $87.04 and $107.68.
The ETF has a beta of 1.14 and standard deviation of 24.07% for the trailing three-year period, making it a medium risk choice in the space. With about 685 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core S&P Small-Cap 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, IJR 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 Russell 2000 ETF (IWM) track a similar index. While Vanguard Small-Cap ETF has $43.84 billion in assets, iShares Russell 2000 ETF has $53.40 billion. VB has an expense ratio of 0.05% and IWM charges 0.19%.
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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iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
SPS Commerce, Inc. (SPSC) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
Vanguard Small-Cap ETF (VB): ETF Research Reports
