Should iShares S&P Small-Cap 600 Value ETF (IJS) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the iShares S&P Small-Cap 600 Value ETF (IJS), a passively managed exchange traded fund launched on 07/24/2000.
The fund is sponsored by Blackrock. It has amassed assets over $6.39 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.18%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.64%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 18.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Blk Csh Fnd Treasury Sl Agency (XTSLA) accounts for about 1.74% of total assets, followed by Academy Sports And Outdoors Inc (ASO) and Advance Auto Parts Inc (AAP).
The top 10 holdings account for about 8.94% of total assets under management.
Performance and Risk
IJS seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index measures the performance of the small capitalization value sector of the U.S. equity market.
The ETF has lost about -6.17% so far this year and is up about 7.21% in the last one year (as of 06/26/2024). In the past 52-week period, it has traded between $82.10 and $104.53.
The ETF has a beta of 1.17 and standard deviation of 21.90% for the trailing three-year period, making it a medium risk choice in the space. With about 514 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P Small-Cap 600 Value ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, IJS is a reasonable option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Avantis U.S. Small Cap Value ETF (AVUV) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Avantis U.S. Small Cap Value ETF has $11.19 billion in assets, Vanguard Small-Cap Value ETF has $27.67 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares S&P Small-Cap 600 Value ETF (IJS): ETF Research Reports
Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports
Academy Sports and Outdoors, Inc. (ASO) : Free Stock Analysis Report
