“At first glance, it’s hard to figure: Two exchange-traded funds follow the same broad class of stocks but beget a huge difference in performance. Both iShares S&P SmallCap 600 (IJR) and iShares Russell 2000 (IWM) track indexes of small firms. But over the past nine years, the S&P SmallCap 600 returned 56 percent, while the Russell 2000 returned 23 percent. Indeed, since 1994 the S&P 600 index has beaten the Russell by, on average, about two percentage points a year, according to a recent study,” Daren Fonda Reports From SmartMoney.
“Rolf Agather, director of business development at Russell Indexes, doesn’t dispute the study’s findings but argues that his firm’s product is a more accurate picture of the small-cap universe. The firm creates its index out of stocks that aren’t big enough to make it into its large- or midcap universe or small enough for its microcap category. S&P is more selective, says Morningstar ETF analyst Bradley Kay, aiming not just for a representative group of small-cap stocks “but also some of the best companies.” Among other requirements, a company generally must have four consecutive quarters of profits to get into the S&P SmallCap 600,” Fonda Reports.
See Full Story: HERE
Here is a breakdown of the two ETF’s for you take a look at below:
The investment (IJR) seeks investment results that correspond closely to the performance, before fees and expenses, of the S&P SmallCap 600 index. The fund invests at least 90% of assets in an aggregate sample of securities that reflect the predominant characteristics of the S&P 600 SmallCap index. It only holds securities that have been traded for at least six months and that have a price greater than $1 on three or more business days over a 12-month period.
|TOP 10 HOLDINGS (IJR) ( 5.71% OF TOTAL ASSETS)|
The investment (IWM) seeks investment results that correspond generally to the price and yield performance of the Russell 2000 index. The fund invests at least 90% of assets in the securities of the underlying index. It uses a representative sampling strategy in order to track the Russell 2000 index, which measures the performance of the small-capitalization sector of the US equity broad market. The fund invests in approximately 2000 of the smallest capitalization-weighted companies in the Russell 3000 index.
|TOP 10 HOLDINGS (IWM) ( 2.46% OF TOTAL ASSETS)|