21 important things you should know about IWM before you buy it

Jennalyn Sobrevilla January 08, 2019

Are you looking to invest in IWM and would like to get some important data points about this ETF (including alternatives to investing in IWM)?  If so, you came to the right place.  

In this iShares Russell 2000 ETF  review, we’ll address key questions our readers have been asking us about this fund, beyond what you can normally find on Yahoo Finance and ETF.com.

iShares Russell 2000 ETF is a top U.S. Small-Cap Growth fund by assets and is hugely popular among individual investors.  We’ll cover some basic and advanced points you should know about IWM, such as:

  1. IWM ETF profile (i.e., what does it track?)
  2. IWM underlying index
  3. IWM number of holdings
  4. IWM historical performance
  5. IWM dividend yield
  6. IWM expense ratio
  7. IWM tax implications
  8. IWM beta (risk level)
  9. IWM Sharpe ratio                                                                                             
  10. IWM vs TLT
  11. IWM vs IWV
  12. IWM vs HYG
  13. IWM vs IWF
  14. IWM vs QQQ
  15. IWM vs IWN
  16. IWM vs IWO
  17. IWM vs VTI
  18. IWM vs IVV
  19. IWM vs VTWO
  20. IWM vs IJR
  21. IWM vs SPY

So let’s start.  Scroll down to questions that are most interesting to you.

1. What is IWM?

The Fund seeks to track the investment results of the Russell 2000 Index which measures the performance of the small-capitalization sector of the US equity market.

2. What is the underlying index for IWM?

Russell 2000 Index.

3. How many stocks does IWM have as its holdings? What are the top holdings?

IWM has 2,015 stocks as its holdings.

The top 10 holdings represent 2.68% of total IWM assets.  Here are the top holdings:

NameSymbol% Assets
bluebird bio IncBLUE0.31
Exact Sciences CorpEXAS0.31
MKS Instruments IncMKSI0.28
MGIC Investment CorpMTG0.26
Sterling BancorpSTL0.26
Curtiss-Wright CorpCW0.26
Catalent IncCTLT0.26
GrubHub IncGRUB0.25
Knight-Swift Transportation Holdings Inc AKNX0.25
Monolithic Power Systems IncMPWR0.24

4. How did IWM perform historically?

IWM has generated the following returns:

  • 1-months return is 1.73%;
  • 3-months return is -11.55%;
  • 1-years return is 0.57%;
  • 3-years return is 10.14%;
  • 5-years return is  7.57%;
  • 10-year annualized return is 14.08%;
  • YTD return is 0.97%.

5.  What is IWM dividend yield and payout?

IWM dividend yield is 1.39%.  Dividend yield is a ratio between an ETF’s annual dividend payout and its current price. 

IWM annualized payout is $1.88.  An annualized payout is a standard in finance that lets you compare companies that have different payout frequencies.

6. What is IWM expense ratio?

IWM expense ratio is 0.2%. The expense ratio of a fund is the total percentage of fund assets used for administrative, management, and all other expenses.

7. What is IWM tax efficiency (tax-cost ratio)?

IWM tax-cost ratio is 0.53%. The tax-cost ratio measures how much a fund’s annualized return is diminished by the taxes investors pay on distributions. Funds like IWM regularly distribute dividends and capital gains.

8. What is IWM beta? How would you assess IWM risk?

IWM 3-year beta is 1.27. Beta is a measure of the volatility, or systematic risk, of a fund in comparison to the market as a whole. S&P 500 Beta is equal to 1. A Beta higher than 1 means riskier than the market overall; conversely, lower than 1 means less risky than the market.

9. What is IWM Sharpe ratio?

The 3-year Sharpe ratio for IWM is 0.66. The Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk. Generally, the greater the value of the Sharpe ratio, the more attractive the risk-adjusted return.

10. Compare and contrast: IWM vs TLT.

IWM is a small-cap ETF focused on the US market, while TLT is a U.S. Treasury bond ETF

IWM has a higher expense ratio than TLT: 0.20% vs. 0.15%.  

Over the last 10 years, IWM returned more than TLT (14.08% vs. 4.14%).  

Below is a comparison table between IWM and TLT.


IWMTLT
SegmentEquity: U.S. - Small CapFixed Income: U.S. Government Treasury Long-Term
Net Assets$40.48B$6.89B
Expense Ratio0.20%0.15%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexICE U.S. Treasury 20+ Year Bond Index
YTD Return0.97%
-7.05%
1-Year Return0.57%
-5.36%
3-Year Return10.14%
0.79%
5-Year Return7.57%
4.73%
10-Year Return14.08%
4.14%
1-Year Tax Cost Ratio0.46%
1.08%

TLT seeks investment results that correspond generally to the price and yield performance of the long-term sector of the U.S. Treasury market as defined by the Barclays Capital 20+ Year Treasury Index.

11. Compare and contrast: IWM vs IWV.

IWM is a small-cap ETF focused on the US market, while IWV is a total market ETF.

IWM and IWV have the same expense ratio of 0.20%.  

Over the last 10 years, IWM returned slightly less than IWV (14.08% vs. 14.30%).  

Below is a comparison table for IWM and IWV.


IWMIWV
SegmentEquity: U.S. - Small CapEquity: U.S. - Total Market
Net Assets$40.48B$8.42B
Expense Ratio0.20%0.20%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexRussell 3000 Index
YTD Return0.97%4.11%
1-Year Return0.57%5.28%
3-Year Return10.14%11.57%
5-Year Return7.57%
10.46%
10-Year Return14.08%
14.30%
1-Year Tax Cost Ratio0.46%0.61%

IWV seeks investment results that correspond to the price and yield performance, before fees and expenses, of the Russell 3000 Index. The Index is a capitalization-weighted index of the largest public companies domiciled in the US and its territories.

12. Compare and contrast: IWM vs HYG.

IWM is a small-cap ETF focused on the US market, while HYG is a corporate high-yield bond ETF. 

HYG has a higher expense ratio than IWM: 0.49% vs. 0.20%.  

Over the last 10 years, IWM returned more than HYG (14.08% vs. 9.41%).  

Below is a comparison table between IWM and HYG.


HYGIWM
SegmentFixed Income: U.S. - Corporate High YieldEquity: U.S. - Small Cap
Net Assets$15.17B$40.48B
Expense Ratio0.49%0.20%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexMarkit iBoxx $ Liquid High Yield IndexRussell 2000 Index
YTD Return0.07%
0.97%
1-Year Return0.31%0.57%
3-Year Return5.66%10.14%
5-Year Return3.18%7.57%
10-Year Return9.41%14.08%
1-Year Tax Cost Ratio2.12%0.46%

HYG seeks investment results that correspond generally to the price and yield performance of the U.S. dollar high-yield corporate bond market as defined by the iBoxx $ Liquid High Yield Index. The Fund will invest at least 90% of its assets in component securities of its Underlying Index.

13. Compare and contrast: IWM vs IWF.

IWF is a large-cap growth ETF focused on the US market, while IWM is a US small-cap ETF

IWM and IWF have the same expense ratio of 0.20%.  

Over the last 10 years, IWF returned more than IWM (16.28% vs. 14.08%).  

Below is a comparison table between IWM and IWF.


IWFIWM
SegmentEquity: U.S. - Large Cap GrowthEquity: U.S. - Small Cap
Net Assets$41.04B$40.48B
Expense Ratio0.20%0.20%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 1000 Growth IndexRussell 2000 Index
YTD Return7.35%
0.97%
1-Year Return8.35%0.57%
3-Year Return13.71%10.14%
5-Year Return12.81%7.57%
10-Year Return16.28%14.08%
1-Year Tax Cost Ratio0.42%0.46%

IWF seeks investment returns that correspond generally to the price and yield performance, before fees and expenses, of the Russell 1000 Growth Index.  The Index measures the performance of the large-capitalization growth sector of the US equity market.

14. Compare and contrast: IWM vs QQQ.

QQQ is a large-cap ETF focused on the US market, while IWM is a US small-cap ETF.  

IWM and QQQ has the same expense ratio of 0.20%.  

Over the last 10 years, QQQ returned more than IWM (20.43% vs. 14.08%).  

Below is a comparison table between IWM and QQQ.


IWMQQQ
SegmentEquity: U.S. - Small CapEquity: U.S. - Large Cap
Net Assets$40.48B$63.24B
Expense Ratio0.20%0.20%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexNASDAQ-100 Index
YTD Return0.97%
9.35%
1-Year Return0.57%
10.00%
3-Year Return10.14%
15.20%
5-Year Return7.57%
15.84%
10-Year Return14.08%
20.43%
1-Year Tax Cost Ratio0.46%
0.28%

QQQ seeks to provide investment results that generally correspond to the price and yield performance of the component securities of the Nasdaq-100 Index.

15. Compare and contrast: IWM vs IWN.

IWM is a small-cap ETF focused on the US market, while IWN is a US small-cap value ETF. 

IWN has a higher expense ratio than IWM: 0.24% vs. 0.20%.  

Over the last 10 years, IWM returned more than IWN (14.08% vs. 12.33%).  

Below is a comparison table between IWM and IWN.


IWMIWN
SegmentEquity: U.S. - Small CapEquity: U.S. - Small Cap Value
Net Assets$40.48B$8.97B
Expense Ratio0.20%0.24%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexRussell 2000 Value Index
YTD Return0.97%-0.98%
1-Year Return0.57%
-1.92%
3-Year Return10.14%
10.00%
5-Year Return7.57%
6.65%
10-Year Return14.08%
12.33%
1-Year Tax Cost Ratio0.46%
0.66%

IWN seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Russell 2000 Value Index.  The Index measures the performance of those firms with lower price-to-book ratios and lower forecasted growth.

16. Compare and contrast: IWM vs IWO.

IWO is a small-cap growth ETF focused on the US market, while IWM is just a small-cap US-centric ETF.  

IWO has a higher expense ratio than IWM: 0.24% vs. 0.20%.  

Over the last 10 years, IWO returned more than IWM (15.58% vs. 14.08%).  

Below is a comparison table between IWM and IWO.


IWMIWO
SegmentEquity: U.S. - Small CapEquity: U.S. - Small Cap Growth
Net Assets$40.48B$8.95B
Expense Ratio0.20%0.24%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexRussell 2000 Growth Index
YTD Return0.97%
2.63%
1-Year Return0.57%
2.81%
3-Year Return10.14%
10.07%
5-Year Return7.57%
8.33%
10-Year Return14.08%
15.58%
1-Year Tax Cost Ratio0.46%
0.24%

IWO seeks investment returns that correspond generally to the price and yield performance, before fees and expenses, of the Russell 2000 Growth Index.  The Index measures the performance of Index firms with higher price-to-book ratios and higher forecasted growth.

17. Compare and contrast: IWM vs VTI.

IWM is a small-cap ETF focused on the US market, while VTI is a total market fund ETF

IWM has a higher expense ratio than VTI: 0.20% vs. 0.04%.  

Over the last 10 years, IWM returned slightly less than VTI (14.08% vs. 14.60%).  

Below is a comparison table between IWM and VTI.


IWMVTI
SegmentEquity: U.S. - Small CapEquity: U.S. - Total Market
Net Assets$40.48B$94.96B
Expense Ratio0.20%0.04%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexCRSP US Total Market Index
YTD Return0.97%
4.35%
1-Year Return0.57%
5.56%
3-Year Return10.14%
11.78%
5-Year Return7.57%
10.61%
10-Year Return14.08%
14.60%
1-Year Tax Cost Ratio0.46%
0.44%

VTI seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The Fund employs a "passive management" approach designed to track the performance of the CRSP US Total Market Index.

18. Compare and contrast: IWM vs IVV.

IVV is an S&P 500 ETF (focused on the US market), while IWM is just US small-cap ETF

IWM has a higher expense ratio than IVV: 0.20% vs. 0.04%.  

Over the last 10 years, IWM returned slightly less than IVV (14.08% vs. 14.24%).  

Below is a comparison table between IWM and IVV.


IVVIWM
SegmentEquity: U.S. - Large CapEquity: U.S. - Small Cap
Net Assets$156.26B$40.48B
Expense Ratio0.04%0.20%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexS&P 500Russell 2000 Index
YTD Return4.83%
0.97%
1-Year Return6.09%
0.57%
3-Year Return12.05%
10.14%
5-Year Return11.05%
7.57%
10-Year Return14.24%
14.08%
1-Year Tax Cost Ratio0.67%
0.46%

IVV seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Index. It uses a replication strategy to try to track the Index, which includes approximately 77% of the market capitalization of all publicly traded US equity securities.

19. Compare and contrast: IWM vs VTWO.

Both IWM and VTWO are US small-cap ETFs. 

IWM has a higher expense ratio than VTWO: 0.20% vs. 0.15%.  

Over the last 5 years, IWM returned slightly more than VTWO (7.57% vs. 7.55%).  

Below is a comparison table between IWM and VTWO.


IWMVTWO
SegmentEquity: U.S. - Small CapEquity: U.S. - Small Cap
Net Assets$40.48B$1.32B
Expense Ratio0.20%0.15%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexRussell 2000 Index
YTD Return0.97%
1.01%
1-Year Return0.57%
0.53%
3-Year Return10.14%
10.15%
5-Year Return7.57%
7.55%
10-Year Return14.08%
N/A
1-Year Tax Cost Ratio0.46%
0.35%

VTWO seeks to track the performance of a benchmark index that measures the investment return of small-capitalization stocks in the United States. The Fund tracks the performance of the Russell 2000 Index.

20. Compare and contrast: IWM vs IJR.

Both IWM and IJR are US small-cap ETFs, but they track different indexes.

IWM has a higher expense ratio than IJR: 0.20% vs. 0.07%.  

Over the last 10 years, IJR returned more than IWM (15.65% vs. 14.08%).  

Below is a comparison table between IWM and IJR.


IJRIWM
SegmentEquity: U.S. - Small CapEquity: U.S. - Small Cap
Net Assets$36.52B$40.48B
Expense Ratio0.07%0.20%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexS&P SmallCap 600 IndexRussell 2000 Index
YTD Return4.21%
0.97%
1-Year Return3.66%
0.57%
3-Year Return12.46%
10.14%
5-Year Return9.42%
7.57%
10-Year Return15.65%
14.08%
1-Year Tax Cost Ratio0.47%0.46%

IJR seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P SmallCap 600 Index. The Fund uses a replication strategy to try to track the Index, which includes approximately 2.5% of the market capitalization of the US equity market.

21. Compare and contrast: IWM vs SPY.

SPY is a large-cap ETF focused on the US market, while IWM is a US small-cap ETF

IWM has a higher expense ratio than SPY: 0.20% vs. 0.09%.  

Over the last 10 years, IWM returned slightly less than SPY (14.08% vs. 14.17%).  

Below is a comparison table between IWM and SPY.


IWMSPY
SegmentEquity: U.S. - Small CapEquity: U.S. - Large Cap
Net Assets$40.48B$278.47B
Expense Ratio0.20%0.09%
Management Stylepassive (index-based)passive (index-based)
Underlying IndexRussell 2000 IndexS&P 500
YTD Return0.97%
4.65%
1-Year Return0.57%
5.91%
3-Year Return10.14%
11.92%
5-Year Return7.57%
10.95%
10-Year Return14.08%
14.17%
1-Year Tax Cost Ratio0.46%
0.75%

SPY seeks investment results that, before expenses, generally correspond to the price and yield performance of the component common stocks of the S&P 500 Index. 

You can also use Finstead's ETF and mutual fund comparison tool to find out more about the alternatives to investing in IWM.  Type any two funds you'd like to compare, such as IWM vs. SPY, or IWM vs. IJR to get insights.  


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