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The iShares Russell 2000 ETF (IWM) is an exchange-traded fund that seeks to track the performance of an index composed of small-capitalization U.S. equities. The ETF is managed by BlackRock (iShares) and trades under the ticker IWM on NYSE Arca.
Classified as a U.S. small-cap equity ETF, IWM aims to reflect, before fees and expenses, the aggregated performance of the securities included in its benchmark index.
To accomplish this objective, the fund employs a passive management strategy, maintaining a portfolio that seeks to replicate the composition and weighting of a representative small cap index, with broad sector and geographical representation within the U.S. market.
IWM’s benchmark is the Russell 2000 Index, which represents the 2,000 smallest companies in the broader Russell 3000 Index, weighted by float-adjusted market capitalization, with periodic reviews to rebalance the portfolio as market conditions and eligibility criteria evolve.
Diversification and sector exposure
IWM provides broad exposure to the U.S. small cap equity segment, with companies operating in various sectors of the economy, including:
Information technology.
Health care.
Consumer discretionary.
Industrials.
Financials
Consumer staples.
Energy.
Structure and costs
Shares of IWM are traded on the secondary market, while creation and redemption of shares are carried out by authorized participants, a mechanism that helps keep the ETF’s market price close to its net asset value (NAV).
The fund carries a competitive expense ratio, typical of passively managed ETFs, and does not charge a performance fee. IWM may make periodic income distributions, derived from dividends paid by constituent companies. The ETF has a single share class and trades exclusively under the ticker IWM.
History and evolution of the ETF
The iShares Russell 2000 ETF was launched in 2000, amid significant growth in the ETF industry and increasing demand for efficient exposure to U.S. small cap equities.
Over time, IWM has become a widely recognized vehicle for gaining exposure to the U.S. small-cap segment.
Between 2020 and 2024, the ETF reflected market cycles characterized by volatility linked to macroeconomic changes, shifts in monetary policy, and variations in investor risk appetite, while maintaining high liquidity and broad utilization as part of diversified equity allocation strategies.
