The iShares Russell 2000 Value ETF (IWN) was launched on 07/24/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $13.46 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
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 1.70%.
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 Financials sector--about 29.50% of the portfolio. Industrials and Real Estate round out the top three.
Looking at individual holdings, Blk Csh Fnd Treasury Sl Agency (XTSLA) accounts for about 0.64% of total assets, followed by Southstate Corp (SSB) and Meritage Corp (MTH).
The top 10 holdings account for about 5.27% 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 added about 14.66% so far this year and is up roughly 36.84% in the last one year (as of 11/14/2024). In the past 52-week period, it has traded between $136.29 and $180.76.
The ETF has a beta of 1.14 and standard deviation of 22.20% for the trailing three-year period, making it a medium risk choice in the space. With about 1444 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Russell 2000 Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IWN is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $15.23 billion in assets, Vanguard Small-Cap Value ETF has $32.32 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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Get it free >>iShares Russell 2000 Value ETF (IWN): ETF Research Reports
Meritage Homes Corporation (MTH) : Free Stock Analysis Report
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
SouthState Corporation (SSB) : Free Stock Analysis Report
Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
