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

Launched on 07/24/2000, the iShares Russell 2000 Value ETF (IWN) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.

The fund is sponsored by Blackrock. It has amassed assets over $10.95 billion, making it one of the largest ETFs attempting to match the Small Cap Value segment of the US equity market.

Why Small Cap Value

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.24%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.78%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 30.30% of the portfolio. Industrials and Real Estate round out the top three.

Looking at individual holdings, Southstate Corp (SSB) accounts for about 0.71% of total assets, followed by Umb Financial Corp (UMBF) and Old National Bancorp (ONB).

The top 10 holdings account for about 5.26% of total assets under management.

Performance and Risk

IWN seeks to match the performance of the Russell 2000 Value Index before fees and expenses. The Russell 2000 Value Index measures the performance of the small-capitalization value sector of the U.S. equity market.

The ETF has gained about 0.22% so far this year and is up roughly 0.31% in the last one year (as of 07/21/2025). In the past 52-week period, it has traded between $131.84 and $181.35.

The ETF has a beta of 1.07 and standard deviation of 21.83% for the trailing three-year period, making it a medium risk choice in the space. With about 1412 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Russell 2000 Value 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, IWN is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Schwab Fundamental U.S. Small Company ETF (FNDA) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Schwab Fundamental U.S. Small Company ETF has $8.49 billion in assets, Vanguard Small-Cap Value ETF has $30.17 billion. FNDA has an expense ratio of 0.25% and VBR charges 0.07%.

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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This article originally published on Zacks Investment Research (zacks.com).

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