The iShares Russell 2000 ETF (IWM) is an exchange-traded fund that tracks the Russell 2000 index, providing exposure to approximately 2,000 small-cap U.S. companies [5]. Managed by BlackRock, IWM offers investors a diversified approach to the small-cap segment of the U.S. equity market, with holdings across multiple sectors including Financials (25.25%), Industrials (17.73%), and Health Care (13.16%) [1]. Since its inception in May 2000, IWM has become one of the most widely traded ETFs for small-cap exposure with approximately $67.4 billion in assets under management [5].

• IWM posted a total return of 11.35% for the trailing 12 months as of the most recent reporting period, slightly underperforming its benchmark index which returned 11.54% [1]
• The ETF maintained a competitive expense ratio of 0.19%, allowing it to deliver strong relative performance compared to the category average expense ratio of 0.98% [5]
• While experiencing significant volatility in recent quarters, IWM has demonstrated resilience with a 3-year annualized return of 3.42% and a 5-year annualized return of 42.14% [1]
• The fund reported a dividend yield of 1.18%, with its most recent quarterly dividend of $0.45985 paid on March 21, 2025 [5]

• IWM's revenue growth averaged 10.1% over the fiscal years ending March 2019 to 2023, with a median growth rate of 10.5% during this period [1]
• The ETF experienced its lowest 5-year revenue growth point in March 2020 at -5.7%, coinciding with the market downturn during the early stages of the COVID-19 pandemic [1]
• Long-term performance shows a compound annual return of 8.99% over the past 30 years (as of February 2025), with a standard deviation of 20.09% [2]
• The fund experienced a maximum drawdown of -52.46% during its history, which required 45 months to recover, highlighting the higher volatility characteristic of small-cap investments [2]
• Recent performance has been challenged by rising interest rates, with approximately 40% of Russell 2000 companies having no earnings, making debt servicing more difficult in the current economic environment [1]

• IWM's portfolio consists of 1,967 holdings with a PE ratio of 16.68, indicating a reasonable valuation relative to earnings [5]
• The ETF maintains a beta of 1.19, suggesting slightly higher volatility compared to the broader market, which is consistent with the small-cap focus [5]
• The fund has a Price to Book ratio of 1.90, providing insight into the valuation of its underlying assets [4]
• IWM has no debt on its balance sheet, with the ETF structure allowing it to avoid leverage-related risks [3]
• The fund maintains sufficient liquidity with high trading volumes (25,662,333 average daily volume), enabling investors to easily enter and exit positions [5]

BlackRock, one of the world's largest asset managers, oversees IWM with a disciplined approach to tracking the Russell 2000 index [5]. The management team has successfully maintained the ETF's tracking accuracy while keeping expenses low at 0.19%, significantly below the category average of 0.98%, demonstrating efficient fund administration and cost control [5]. Their commitment to providing investors with broad small-cap exposure is evidenced by the fund's diversification across nearly 2,000 holdings.

IWM currently trades at a PE ratio of 16.68, which is relatively reasonable compared to historical averages for small-cap stocks [5]. According to Macroaxis, the ETF appears fairly valued with a real value estimate of $206.26 compared to its current price of $208.86 [4]. The fund's Price to Book ratio of 1.90 suggests it trades at a modest premium to the book value of its underlying assets [4]. When considering the risk-adjusted returns, IWM has delivered a Sharpe Ratio of 0.33 over a 30-year period, indicating moderate efficiency in generating returns relative to risk [2].

The primary risks associated with IWM include its higher volatility (standard deviation of 20.09% over 30 years) compared to large-cap funds and sensitivity to economic conditions [2]. Approximately 40% of Russell 2000 companies have no earnings, making the index particularly vulnerable to interest rate increases and economic downturns [1]. Additionally, IWM faces competition from lower-cost alternatives like Vanguard's VTWO ETF, which offers a similar exposure with a more competitive expense ratio of 0.10% [4].

IWM represents a solid investment vehicle for gaining exposure to the U.S. small-cap equity market with its comprehensive coverage, reasonable expense ratio, and strong long-term performance record. Given the current economic environment with potential interest rate cuts on the horizon and the historical tendency for small-caps to outperform during economic recoveries, IWM merits a BUY recommendation for investors seeking diversified small-cap exposure with a medium to long-term investment horizon.