ETF Profile: iShares Russell 2000 Index ETF

Joel Anderson |

Playing the small-cap market is a recipe for higher risk, higher returns than investing in blue-chips or other large-cap stocks. When times are good, they’re usually really good. When times are bad, they’re usually really bad.

However, for those willing to accept more risk, the opportunity for greater returns is there. A lot was said about the 30-percent gain for the S&P 500 during the bull market of 2013, but that same time period saw the Russell 2000 gain 40 percent.

So, for those looking to invest in the small-cap market, an ETF with broad exposure to a large basket of small-cap stocks can be an excellent way to assume the risk of the small-cap market without the extreme risk of buying stocks in individual small-cap companies. And for that purpose, one of the most popular options is the iShares Russell 2000 Index ETF (IWM). Here’s a closer look at the ETF and its holdings.

IWM Profile

Index: Russell 2000

The Russell 2000 consists of the 2,000 smallest companies contained on the Russell 3000.

Exposure: US small-cap equities

Russell’s indices are rules-based and market-cap weighted, so the Russell 3000 contains the 3000 largest companies in the United States by market cap. By taking the bottom 2,000 companies, the index gives broad exposure to American small-cap companies. Despite having two-thirds of the companies on the Russell 3000, it holds only 10 percent of that index’s total market cap.



The largest company, athenahealth (ATHN), has a market cap of just $7.43 billion.

Issuer: iShares

Market Cap: $25.53 billion

Expense Ratio: 0.25 percent

Dividend Yield: 1.21 percent

While dividends are a relative rarity among small-cap companies, enough feature one that IWM still offers a small quarterly payout.

Average daily volume: 38.21 million shares

This remains a popular play as IWM is among the five most-actively traded ETFs on the market.

Six Month Performance: 13.48 percent

One-year Performance: 31.52 percent

Five-year Performance: 184.59 percent

Top Ten Holdings

athenahealth (ATHN) 0.43 percent

ISIS Pharmaceuticals (ISIS) — 0.40 percent

Acuity Brands (AYI) — 0.35 percent

Costar Group (CSGP) — 0.34 percent

Alnylam Pharmaceuticals (ALNY) — 0.32 percent

Middelby Corp (MIDD) — 0.30 percent

Rite Aid (RAD) — 0.29 percent

Ultimate Software Group (ULTI) — 0.28 percent

PTC Inc. ($PTC) — 0.28 percent

Aspen Technology (AZPN) — 0.27 percent

All information accurate as of Feb. 24, 2014.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AYI Acuity Brands Inc (Holding Company) 166.31 -1.54 -0.92 612,102 Trade
MIDD The Middleby Corporation 128.47 0.99 0.78 303,526 Trade
ATHN athenahealth Inc. 133.34 -2.40 -1.77 482,356 Trade
RAD Rite Aid Corporation 3.70 0.04 1.09 11,662,768 Trade
AZPN Aspen Technology Inc. 60.52 0.66 1.10 321,272 Trade
ALNY Alnylam Pharmaceuticals Inc. 69.50 -0.47 -0.67 1,010,113 Trade
ULTI The Ultimate Software Group Inc. 220.07 1.11 0.51 155,480 Trade
ISIS Isis Pharmaceuticals Inc. n/a n/a n/a 0 Trade
CSGP CoStar Group Inc. 259.52 1.52 0.59 224,504 Trade
PTC PTC Inc. 58.14 1.00 1.75 2,086,977 Trade
MNHFF Mayr Melnhof Karton AG 102.32 0.00 0.00 0

Comments

Emerging Growth

Blow & Drive Interlock Corp

Blow & Drive Interlock Corp manufactures, markets, leases, installs and monitors a Breath Alcohol Ignition Interlock Device mechanism on the steering column of an automobile and into which a driver…

Private Markets

BioSculpture Technology, Inc.

BioSculpture Technology, Inc. (“BST”) is a commercial-stage medical device manufacturer of liposuction surgical instruments for surgeons. It offers the FDA-cleared Twin Cannula Assisted Liposuction ("TCAL") Airbrush Liposculptor II® controllers, Airbrush®…

Quants Inc

Quants, Inc, a California Corporation, develops, markets and operates financial technology platforms and alternative investment products offering sophisticated risk management since 2010. The Company has primarily sharpened its focus with…