The Russell 2000 and the S&P SmallCap 600 Indexes are the benchmarks of benchmarks when it comes to smaller U.S. stocks. There are plenty of exchange-traded funds linked to those indexes, but for the purposes of this piece, we'll use the iShares Russell 2000 Index (ETF) (NYSE: IWM), the largest small-cap ETF, and the iShares S&P SmallCap 600 Index (ETF) (NYSE: IJR).
As their names imply the Russell 2000 and the S&P SmallCap 600 Indexes hold about 2,000 and 600 stocks, respectively. With such a wide discrepancy in the number of holdings it is reasonable to expect, particularly over longer holding periods, that these small-cap benchmarks will produce returns that are nowhere close to each other.
To be precise, IWM currently holds 1,945 stocks while IJR is home to 600 small caps, according to iShares data.
However, there are other differences investors ...
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