By Ron DeLegge
Ron: This is a program that is the antithesis of a judgment-free zone. Why? Because we deliberate and judge, we deliberate and judge, and when we're all done, we deliberate and judge just a little bit more. Yes, it's a hostile work environment, I get it! But if it helps to make us better, more informed investors, who really cares?
Today's ETF Battle is between two ETFs that tracks US small cap stocks. We've got the iShares Core S&P Small-Cap ETF (IJR) up against the iShares Russell 2000 ETF (IWM). The definition of small cap stocks can vary, but generally speaking, we're talking about companies with a market size between $500 million up to $5 billion.
Helping us to judge today's matchup is none other than Todd Rosenbluth, head of ETF and mutual fund research at CFRA, and John Davi, founder and CIO at Astoria Portfolio Advisors. Judges, great to see you again.
So, the four battle categories are cost, diversification, performance, and then we've got a mystery battle category. Now, for our mystery category, that's where our judges get to choose one factor or maybe several factors that they feel are important to supporting their analysis, and that mystery category, by the way, could determine which of these two ETFs wins today's battle. We're gonna start with Todd. The first battle category is cost, you've got 30 seconds, go!
Todd: So, iShares cut the fee for IJR to 6 basis points recently, probably ahead of this battle just to make sure it was even cheaper than IWM, which is 19 basis points, so a much lower expense ratio for the iShares S&P product, and the volume is still strong, not as strong as IWM, but enough to offset the cost differential, so we think IJR is easily a much cheaper ETF to consider.
