Should iShares S&P Small-Cap 600 Value ETF (IJS) Be on Your Investing Radar?

Looking for broad exposure to the Small Cap Value segment of the US equity market? You should consider the iShares S&P Small-Cap 600 Value ETF (IJS), a passively managed exchange traded fund launched on 07/24/2000.

The fund is sponsored by Blackrock. It has amassed assets over $5.85 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.

Why Small Cap Value

With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

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 0.18%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 2.09%.

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 19.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.

Looking at individual holdings, Mr Cooper Group Inc (COOP) accounts for about 1.42% of total assets, followed by Blk Csh Fnd Treasury Sl Agency (XTSLA) and Teleflex Inc (TFX).

Performance and Risk

IJS seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index measures the performance of the small capitalization value sector of the U.S. equity market.

The ETF has lost about -14.58% so far this year and is down about -5.36% in the last one year (as of 05/08/2025). In the past 52-week period, it has traded between $83.54 and $118.05.

The ETF has a beta of 1.07 and standard deviation of 22.85% for the trailing three-year period, making it a medium risk choice in the space. With about 497 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares S&P Small-Cap 600 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, IJS is a great 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 Avantis U.S. Small Cap Value ETF (AVUV) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Avantis U.S. Small Cap Value ETF has $14.47 billion in assets, Vanguard Small-Cap Value ETF has $27.74 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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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