ETF Spotlight: iShares Russell 2000 Value Index (IWN)

February 17th at 2:00pm by Tom Lydon

ETF Spotlight on the iShares Russell 2000 Value Index (NYSEArca: IWN), part of a weekly series. Assets: $3.4 billion

Objective: Seeks to track the performance of the Russell 2000 Value index.

Holdings: Components of this fund include some of the country’s top small-cap companies, including E*Trade (NASDAQ: ETFC), Rent-A-Center (NASDAQ: RCII) and JetBlue (NASDAQ: JBLU)

What You Should Know

  • Small-caps are companies with market capitalizations between $300 million and $2 billion
  • Small-caps tend to do well in economic recoveries because their small size makes them better able to react and adjust as market conditions shift
  • Many major corporations began their lives as a small-cap company – Google (NASDAQ: GOOG) didn’t become Google overnight, after all
  • Small-caps have dominated large-caps over the last decade: the S&P SmallCap 600 rose 68% from 2000-2009, while the S&P 500 lost 24.1%, says Ben Steverman for BusinessWeek

The Latest News

  • While small-caps are still performing well, their dominance over large-caps is waning a little
  • Part of the reason for this is concerns over a tepid economic recovery
  • As monetary policy tightens (the Federal Reserve says it could be awhile before they raise rates, however), experts suggest easing up on small-cap exposure slightly
  • Experts also suggest that for the time being, small-caps have good momentum, says BusinessWeek

For past ETF Spotlights, visit our ETF Spotlight page.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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