ETF Spotlight: iShares Russell 2000 Value Index

Feb.18.10 | About: iShares Russell (IWN)

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