Yahoo Finance Should iShares Russell 2000 Value ETF (IWN) 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 Russell 2000 Value ETF (IWN), a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $11.27 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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
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 0.24%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.04%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 25.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Chord Energy Corp- (CHRD) accounts for about 0.84% of total assets, followed by Permian Resources Corp Class A- (PR) and Carvana Class A- (CVNA).
The top 10 holdings account for about 5.16% 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 lost about -1.89% so far this year and is up about 10.31% in the last one year (as of 07/09/2024). In the past 52-week period, it has traded between $125.51 and $158.93.
The ETF has a beta of 1.15 and standard deviation of 21.48% 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IWN is a reasonable option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
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 $11.37 billion in assets, Vanguard Small-Cap Value ETF has $27.34 billion. AVUV 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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iShares Russell 2000 Value ETF (IWN): ETF Research Reports
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
Carvana Co. (CVNA) : Free Stock Analysis Report
Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports
Chord Energy Corporation (CHRD) : Free Stock Analysis Report
Permian Resources Corporation (PR) : Free Stock Analysis Report