Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the iShares Core S&P SmallCap ETF (IJR) is a passively managed exchange traded fund launched on 05/22/2000.
The fund is sponsored by Blackrock. It has amassed assets over $76.63 billion, making it 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.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.06%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.06%.
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 17.10% of the portfolio. Information Technology and Consumer Discretionary round out the top three.
Looking at individual holdings, Blk Csh Fnd Treasury Sl Agency (XTSLA) accounts for about 1.17% of total assets, followed by Macys Inc (M) and Omnicell Inc (OMCL).
The top 10 holdings account for about 6.53% 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 return is roughly 32.77% so far this year and it’s up approximately 43.86% in the last one year (as of 11/17/2021). In the past 52-week period, it has traded between $83.48 and $120.32.
The ETF has a beta of 1.20 and standard deviation of 29.35% for the trailing three-year period, making it a medium risk choice in the space. With about 683 holdings, it effectively diversifies company-specific risk.
IShares Core S&P SmallCap 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 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 SmallCap ETF (VB) and the iShares Russell 2000 ETF (IWM) track a similar index. While Vanguard SmallCap ETF has $51.45 billion in assets, iShares Russell 2000 ETF has $75.05 billion. VB has an expense ratio of 0.05% and IWM charges 0.19%.
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 SmallCap ETF (IJR): ETF Research Reports
Macy’s, Inc. (M) : Free Stock Analysis Report
Omnicell, Inc. (OMCL) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
Vanguard SmallCap ETF (VB): ETF Research Reports
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