These Two ETF’s Follow The Same Class Of Stocks But Have Performed Differently

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September 28, 2009 1:28pm ETF BASIC NEWS NYSE:IJR

narrow“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)  
 
Company Symbol % Assets
ATMOS ENERGY CP (ATO) 0.69
Green Mountain Coffee Roasters, (GMCR) 0.51
KIRBY CORPORATION (KEX) 0.55
MEDNAX, INC (MD) 0.65
PIEDMONT NAT GAS CO (PNY) 0.48
ROCK-TENN CO CL A (RKT) 0.54
SENIOR HSG SBI (SNH) 0.66
Skyworks Solutions, Inc. (SWKS) 0.53
Tetra Tech, Inc. (TTEK) 0.49
Varian Semiconductor Equipment (VSEA) 0.61

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)  
 
Company Symbol % Assets
BALLY TECHNOLOGIES (BYI) 0.26
HIGHWOODS PRPTY INC (HIW) 0.25
Human Genome Sciences, Inc. (HGSI) 0.32
Jack Henry & Associates, Inc. (JKHY) 0.23
Knight Capital Group, Inc. (NITE) 0.22
Polycom, Inc. (PLCM) 0.23
ROCK-TENN CO CL A (RKT) 0.23
Skyworks Solutions, Inc. (SWKS) 0.23
TUPPERWARE BRANDS CP (TUP) 0.27
WATSON WYATT WLD WD (WW) 0.22

Chart for iShares S&P SmallCap 600 Index (IJR)

 

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