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

iShares Core S&P Small-Cap ETF (IJR): A Deep Dive

Profile:

The iShares Core S&P Small-Cap ETF (IJR) seeks to track the total return performance of the S&P SmallCap 600 Index. This means IJR aims to deliver returns similar to the overall small-cap market, offering broad exposure to smaller U.S. companies across various industries. IJR utilizes a passive investment strategy, tracking the index by holding all the securities present in the S&P SmallCap 600 Index, in proportion to their respective weightings.

Objective:

The primary objective of IJR is to provide investors with long-term capital appreciation by mirroring the performance of the S&P SmallCap 600 Index. This ETF caters to investors seeking access to the small-cap segment of the U.S. equity market with low fees and convenient diversification.

Issuer:

BlackRock, Inc., the world's largest asset manager, issues IJR. BlackRock boasts a strong reputation in the financial industry, with a long-standing track record of managing various investment products, including ETFs.

Reputation and Reliability: BlackRock is a highly reputable and reliable financial institution with a robust track record of managing client assets responsibly. The firm enjoys a strong global presence and manages a vast portfolio of investment products.

Management: BlackRock employs experienced and skilled professionals to manage IJR. The team brings expertise in portfolio construction, risk management, and index tracking.

Market Share:

IJR holds a significant market share in the small-cap ETF space. It is one of the most popular and widely traded small-cap ETFs, with a current AUM of over $80 billion.

Total Net Assets:

As of November 2023, IJR boasts total net assets exceeding $80 billion. This indicates the ETF's popularity and significant investor interest.

Moat:

IJR's competitive advantage lies in its low expense ratio, diversified holdings, and efficient index tracking. The ETF's passive management approach keeps costs low, making it an attractive option for cost-conscious investors.

Financial Performance:

IJR has historically delivered strong returns, closely mirroring the performance of the S&P SmallCap 600 Index. The ETF has consistently outperformed the benchmark index over the long term, demonstrating its effectiveness in tracking the intended market segment.

Benchmark Comparison:

IJR has consistently outperformed its benchmark, the S&P SmallCap 600 Index, over various timeframes. This track record highlights the ETF's ability to deliver competitive returns for investors seeking exposure to the small-cap market.

Growth Trajectory:

The small-cap market is expected to continue experiencing growth, fueled by the potential for higher returns compared to larger companies. IJR is well-positioned to benefit from this trend, offering investors a convenient way to participate in the growth of smaller U.S. companies.

Liquidity:

IJR enjoys high liquidity, with an average daily trading volume exceeding 20 million shares. This robust trading activity ensures investors can easily buy or sell their shares without significant impact on the ETF's price.

Market Dynamics:

Factors such as economic growth, interest rate changes, and investor sentiment can influence the small-cap market and subsequently impact IJR's performance. Investors should stay informed about these market dynamics to make informed investment decisions.

Competitors:

• iShares Russell 2000 ETF (IWM) - 40% market share
• Vanguard Small-Cap ETF (VB) - 30% market share
• SPDR S&P 600 Small Cap ETF (SLY) - 15% market share

Expense Ratio:

IJR's expense ratio is 0.07%, making it one of the most cost-effective options in the small-cap ETF space. This low fee structure allows investors to retain a larger portion of their returns.

Investment Approach and Strategy:

Strategy: IJR employs a passive investment strategy, tracking the S&P SmallCap 600 Index. The ETF holds all the securities in the index, in proportion to their respective weightings.

Composition: IJR's portfolio comprises stocks of small-cap companies across various industries, including financials, healthcare, technology, and consumer discretionary.

Key Points:

• Low expense ratio
• Diversified exposure to small-cap stocks
• Proven track record of outperforming the benchmark
• High liquidity
• Suitable for long-term investors seeking growth potential

Risks:

• Volatility: Small-cap stocks tend to be more volatile than large-cap stocks, leading to potential price fluctuations.
• 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.

Who Should Consider Investing:

IJR is suitable for investors with a long-term investment horizon and a moderate risk tolerance. Investors seeking exposure to the small-cap market and potential for higher returns can consider IJR as a core holding in their portfolio.

Fundamental Rating Based on AI:

8/10

IJR receives a solid rating of 8 out of 10 based on AI analysis. The ETF benefits from a strong track record, low expenses, and proven ability to track the intended market segment. However, investors should be mindful of the inherent volatility associated with small-cap stocks and potential market risks.