iShares Core S&P Small-Cap ETF (IJR)IJR

US ETF iShares Core S&P Small-Cap ETF (IJR)

Profile: IJR is a passively managed ETF that tracks the S&P SmallCap 600 Index. It invests in small-cap US stocks across various industries.

Objective: IJR seeks to replicate the total return performance of the S&P SmallCap 600 Index, before fees and expenses.

Issuer: BlackRock (iShares):

• Reputation: BlackRock is the world’s largest asset manager, known for its strong reputation and global reach.
• Reliability: The firm has a proven track record of managing ETFs and other investment products.
• Management: iShares comprises experienced portfolio managers and analysts with deep expertise in index tracking and small-cap investing.

Market Share:

• IJR controls a 72.89% market share within its category of small-cap blend ETFs.

Total Net Assets:

• IJR holds approximately $58.43 billion in total net assets as of November 17th, 2023.

Moat:

• Low-cost management: IJR’s low expense ratio creates a significant competitive advantage.
• Liquidity: The ETF boasts high trading volume and tight bid-ask spreads, making it easy to buy and sell shares.
• Brand recognition: BlackRock's reputable brand attracts investors seeking reliable and low-cost investment solutions.

Financial Performance:

• Historical: IJR has consistently delivered strong returns, outperforming its benchmark index over the long term.
• Benchmark Comparison: The ETF has outpaced the S&P SmallCap 600 Index on a 1-year, 3-year, and 5-year basis as of November 17th, 2023.

Growth Trajectory:

• The small-cap market is historically known for higher growth potential compared to large-cap stocks, suggesting continued growth for IJR in the long run.

Liquidity:

• Average Trading Volume: IJR experiences a high average daily trading volume of approximately 16.52 million shares.
• Bid-Ask Spread: The ETF maintains a tight bid-ask spread, indicating low transaction costs.

Market Dynamics:

• Economic growth: A strong economic outlook typically benefits small-cap companies, positively impacting IJR.
• Interest rate fluctuations: Rising interest rates can negatively impact small-cap stocks, while falling rates can stimulate growth.
• Market sentiment: Investor confidence and risk appetite influence small-cap performance.

Competitors:

• Schwab Small-Cap ETF (SCHA): 0.07% market share
• Vanguard Small-Cap ETF (VB): 24.55% market share
• SPDR S&P SmallCap 600 ETF (SLY): 2.59% market share

Expense Ratio:

• IJR has a very low expense ratio of 0.03%, making it one of the most affordable small-cap ETFs available.

Investment Approach and Strategy:

• Strategy: IJR passively tracks the S&P SmallCap 600 Index, replicating its performance.
• Composition: The ETF invests in around 600 small-cap US stocks across various sectors, including technology, healthcare, consumer discretionary, and industrials.

Key Points:

• IJR offers investors a low-cost and efficient way to gain exposure to the small-cap market.
• The ETF has a strong track record of outperforming its benchmark and delivers competitive returns.
• IJR benefits from high liquidity, making it easy to trade.

Risks:

• Volatility: Small-cap stocks tend to be more volatile than large-cap stocks, leading to potential fluctuations in IJR’s value.
• Market Risk: IJR’s performance is directly tied to the performance of the small-cap market, which can be influenced by various economic and market factors.
• Sector Concentration: IJR’s sector allocation could lead to higher volatility compared to broader market ETFs.

Who Should Consider Investing:

• Investors seeking long-term growth potential and diversification within their portfolio.
• Individuals with a higher risk tolerance who are comfortable with potential volatility.
• Investors aiming to gain exposure to the small-cap segment of the US stock market.

Fundamental Rating Based on AI: 8.5/10

Justification:

IJR receives a high score due to its strong combination of low cost, diversified portfolio, proven track record, and high liquidity. The ETF’s passive management strategy and competitive expense ratio make it an attractive choice for cost-conscious investors. However, investors should be aware of the inherent volatility associated with small-cap stocks.

Resources and Disclaimer

Data used in this analysis was sourced from the following websites:

• iShares website: https://www.ishares.com/us/products/etf-list/ijr?searchTerm=IJR&country=US&lang=en
• ETF.com: https://etfdb.com/etf/IJR/ishares-core-sp-small-cap/
• Yahoo Finance: https://finance.yahoo.com/quote/IJR/

This information should not be considered financial advice. Please consult with a professional financial advisor before making any investment decisions.