Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider 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 $74.08 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 2.36%.
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. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Blk Csh Fnd Treasury Sl Agency (XTSLA) accounts for about 1.45% of total assets, followed by Mr Cooper Group Inc (COOP) and Corcept Therapeutics Inc (CORT).
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 lost about -12.76% so far this year and is down about -2.93% in the last one year (as of 04/29/2025). In the past 52-week period, it has traded between $90.56 and $127.38.
The ETF has a beta of 1.06 and standard deviation of 22.46% for the trailing three-year period, making it a medium risk choice in the space. With about 645 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 $57.54 billion in assets, iShares Russell 2000 ETF has $59.26 billion. VB has an expense ratio of 0.05% and IWM charges 0.19%.
Bottom-Line
Passively 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.
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iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports Corcept Therapeutics Incorporated (CORT): Free Stock Analysis Report iShares Russell 2000 ETF (IWM): ETF Research Reports Vanguard Small-Cap ETF (VB): ETF Research Reports MR. COOPER GROUP INC (COOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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