Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the iShares S&P Small-Cap 600 Growth ETF (IJT), a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $5.92 billion, making it one of the larger ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
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 0.18%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.10%.
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 20.70% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Spx Technologies Inc (SPXC) accounts for about 1.06% of total assets, followed by Badger Meter Inc (BMI) and Stride Inc (LRN).
Performance and Risk
IJT seeks to match the performance of the S&P SmallCap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index measures the performance of the small-capitalization growth sector of the U.S. equity market.
The ETF has lost about -4.25% so far this year and it's up approximately 2.25% in the last one year (as of 06/19/2025). In the past 52-week period, it has traded between $108.87 and $150.65.
The ETF has a beta of 1.08 and standard deviation of 21.54% for the trailing three-year period, making it a medium risk choice in the space. With about 357 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P Small-Cap 600 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IJT is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $11.21 billion in assets, Vanguard Small-Cap Growth ETF has $18.46 billion. IWO has an expense ratio of 0.24% and VBK 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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iShares S&P Small-Cap 600 Growth ETF (IJT): ETF Research Reports Badger Meter, Inc. (BMI): Free Stock Analysis Report Stride, Inc. (LRN): Free Stock Analysis Report iShares Russell 2000 Growth ETF (IWO): ETF Research Reports SPX Technologies, Inc. (SPXC): Free Stock Analysis Report Vanguard Small-Cap Growth ETF (VBK): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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