iShares Russell 2000 ETF (IWM): Complete Beginner's Guide
iShares Russell 2000 ETF (IWM) is a u.s. small-cap blend ETF from BlackRock with an expense ratio of 0.19% and $72.0B in assets under management. Our Beginner Suitability Score: 8.5/10 (Great for Beginners). 5-year annualized return: 8.20%.
Last updated: April 2026
BlackRock • U.S. Small-Cap Blend
Expense Ratio
0.19%
AUM
$72.0B
Dividend Yield
1.30%
Inception
2000
Beginner Score
8.5/10
What is iShares Russell 2000 ETF?
IWM tracks the Russell 2000 index, which includes 2,000 small-cap U.S. companies. Small-cap stocks are younger, faster-growing companies that have historically delivered higher returns than large-caps over very long time periods, but with significantly more volatility. Beginners should view IWM as a way to add growth potential through smaller companies that could become the large-caps of tomorrow.
IWM is managed by BlackRock and has been available since 2000. With $72.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.19%, which means for every $10,000 you invest, you pay approximately $19 per year in management fees.
IWM at a Glance — Key Metrics
| Expense Ratio | 0.19% |
| Total Holdings | 1,955 |
| P/E Ratio | 28.5 |
| Beta | 1.22 |
| Dividend Yield | 1.30% |
| AUM | $72.0B |
| Inception Year | 2000 |
| Issuer | BlackRock |
Top 10 Holdings in IWM
IWM holds 1,955 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | FTAI Aviation Ltd. | FTAI | 0.60% |
| 2 | Sprouts Farmers Market Inc. | SFM | 0.50% |
| 3 | Insmed Inc. | INSM | 0.50% |
| 4 | Vaxcyte Inc. | PCVX | 0.40% |
| 5 | Mueller Water Products Inc. | MWA | 0.40% |
| 6 | Fluor Corp. | FLR | 0.40% |
| 7 | Fabrinet | FN | 0.40% |
| 8 | Comfort Systems USA Inc. | FIX | 0.40% |
| 9 | ChampionX Corp. | CHX | 0.30% |
| 10 | Enovis Corp. | ENOV | 0.30% |
IWM's top holding is FTAI Aviation Ltd. (FTAI) at 0.60%, followed by Sprouts Farmers Market Inc. (SFM) at 0.50% and Insmed Inc. (INSM) at 0.50%. The top 10 holdings account for 4.20% of the fund's 1,955 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | FTAI Aviation Ltd. | FTAI | 0.60% |
| 2 | Sprouts Farmers Market Inc. | SFM | 0.50% |
| 3 | Insmed Inc. | INSM | 0.50% |
| 4 | Vaxcyte Inc. | PCVX | 0.40% |
| 5 | Mueller Water Products Inc. | MWA | 0.40% |
| 6 | Fluor Corp. | FLR | 0.40% |
| 7 | Fabrinet | FN | 0.40% |
| 8 | Comfort Systems USA Inc. | FIX | 0.40% |
| 9 | ChampionX Corp. | CHX | 0.30% |
| 10 | Enovis Corp. | ENOV | 0.30% |
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IWM Performance History
Here's how IWM has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
1.50%
1 Year
17.80%
3 Year
2.50%
5 Year
8.20%
10 Year
7.80%
IWM has returned 8.20% annualized over 5 years and 7.80% over 10 years. YTD return is 1.50%.
View data table
| Period | Return |
|---|---|
| YTD | 1.50% |
| 1 Year | 17.80% |
| 3 Year | 2.50% |
| 5 Year | 8.20% |
| 10 Year | 7.80% |
Beginner Suitability Score: 8.5/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
IWM scores 8.5/10 because it has very low fees, can be more volatile than the broader market, offers broad diversification across 1,955 holdings, and has been available since 2000, giving it a proven track record.
How to Buy IWM — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "IWM" — Use the search bar in your brokerage platform to find iShares Russell 2000 ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
IWM Sector Allocation
Here's how IWM distributes its investments across different sectors of the economy:
IWM's largest sector allocation is Financials at 17.8%, followed by Industrials at 16.5% and Health Care at 15.2%.
View data table
| Sector | Weight |
|---|---|
| Financials | 17.8% |
| Industrials | 16.5% |
| Health Care | 15.2% |
| Information Technology | 13.8% |
| Consumer Discretionary | 11.2% |
| Energy | 6.2% |
| Real Estate | 5.8% |
| Materials | 4.8% |
| Consumer Staples | 3.5% |
| Communication Services | 3.2% |
| Utilities | 2.0% |
Dollar Cost Averaging Into IWM
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With IWM's expense ratio of 0.19%, a $10,000 investment would lose approximately $1,613 to fees over 20 years compared to a zero-fee investment. This is significant — consider whether the fund's strategy justifies these costs.
IWM's expense ratio of 0.19% costs $1,613 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $44,997.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,564 | $129 |
| 10 | $21,589 | $21,212 | $377 |
| 15 | $31,722 | $30,895 | $827 |
| 20 | $46,610 | $44,997 | $1,613 |
Pros and Cons of IWM
Pros
- ✓Broad exposure to nearly 2,000 small-cap companies with significant growth potential
- ✓Small-caps have historically outperformed large-caps over very long time horizons
- ✓No single stock dominates the portfolio, with the largest holding under 1%
- ✓Provides exposure to domestic-focused companies less affected by global trade issues
Cons
- ✗Significantly higher volatility than large-cap ETFs, with steeper drawdowns during bear markets
- ✗Has substantially underperformed large-cap indexes over the past decade
- ✗Many holdings are unprofitable companies, resulting in a higher portfolio P/E ratio
IWM vs Similar ETFs
See how IWM stacks up against similar funds:
Frequently Asked Questions
Is IWM a good ETF for beginners?▾
IWM has a Beginner Suitability Score of 8.5/10 on our scale. This makes it a strong choice for new investors due to its low fees and broad diversification.
What is the expense ratio of IWM?▾
IWM has an expense ratio of 0.19%. This means for every $10,000 you invest, you pay approximately $19 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in IWM?▾
You can invest in IWM with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does IWM pay dividends?▾
Yes, IWM pays dividends with a current yield of approximately 1.30%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in IWM?▾
The top holdings in IWM include FTAI Aviation Ltd. (0.60%), Sprouts Farmers Market Inc. (0.50%), Insmed Inc. (0.50%), and more. The fund holds 1,955 total positions, providing broad diversification across many companies.
What sectors does IWM invest in?▾
IWM's largest sector allocations are Financials (17.80%), Industrials (16.50%), Health Care (15.20%). This sector distribution shows a focus on financials stocks.
How much do IWM's fees cost over time?▾
With an expense ratio of 0.19%, a $10,000 investment in IWM would lose approximately $1,613 to fees over 20 years (assuming 8% annual returns). Consider whether the fund's strategy justifies these costs.