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If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Global X Russell 2000 ETF (RSSL), a passively managed exchange traded fund launched on 06/04/2024.
The fund is sponsored by Global X Management. It has amassed assets over $1.48 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.08%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.07%.
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 16.90% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Sprouts Farmers (SFM) accounts for about 0.59% of total assets, followed by Insmed Inc (INSM) and Ftai Aviation Ltd (FTAI).
The top 10 holdings account for about 4.09% of total assets under management.
Performance and Risk
RSSL seeks to match the performance of the RUSSELL 2000 RIC CAPPED INDEX before fees and expenses. The Russell 2000 RIC Capped Index measures the performance of the small-capitalization sector of the U.S. equity market.
The ETF has lost about -7.10% so far. In the past 52-week period, it has traded between $77.78 and $95.64.
With about 1951 holdings, it effectively diversifies company-specific risk.
Alternatives
Global X Russell 2000 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, RSSL is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $66.86 billion in assets, iShares Core S&P Small-Cap ETF has $79.85 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.