ETF Trends
ETF Trends

U.S. Small Cap equity funds are back in the spotlight and this time in a positive light given the impressive trailing one month performance.

Interest in the largest ETF in the segment in terms of assets under management, IWM (iShares Russell 2000, Expense Ratio 0.24%) has been reinvigorated by solid recent performance, as IWM briefly traded as low as a $107 handle in mid-May before its resurrection to current levels which is above $118.

This move is especially noteworthy heading into the annual Russell 2000 Reconstitution, which finalizes this Friday, June 27th at the close of the trading day.

Despite the recent net inflows into IWM amid the rally, the fund has still net lost assets year to date, seeing greater than $2 billion flow out of the fund via redemptions.

The second largest fund in the space, IJR (iShares Core S&P Small Cap, Expense Ratio 0.17%) has also had strong performance recently but it has fared no better in terms of asset retention (>-$800
mln year to date).

Interestingly, the number three and number four “U.S. Small Cap Equity” funds in the space, VB (Vanguard Small Cap, Expense Ratio 0.09%) and SCHA (Schwab U.S. Small Cap, Expense Ratio 0.08%) have both impressively outpaced both IWM and IJR YTD in terms of performance, and evidence suggests that it has won some new assets for the funds in terms of net inflow activity (VB +>$900
mln YTD, SCHA +>$100 mln YTD).

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