IJT vs. RZG: Two Small-Cap ETFs But One Has Performed Largely Better

Core Viewpoint - The article compares two small-cap growth ETFs, the iShares S&P Small-Cap 600 Growth ETF (IJT) and the Invesco S&P SmallCap 600 Pure Growth ETF (RZG), highlighting their differences in cost, performance, risk, and portfolio composition. Cost & Size - RZG has an expense ratio of 0.35%, while IJT has a lower expense ratio of 0.18% [2][3] - The one-year return for RZG is 12.99%, compared to IJT's 5.75% [2] - RZG offers a dividend yield of 0.36%, whereas IJT provides a higher yield of 0.9% [3] - RZG has assets under management (AUM) of $104.83 million, significantly smaller than IJT's AUM of $6.29 billion [2] Performance & Risk Comparison - RZG experienced a maximum drawdown of 38.33% over five years, while IJT had a lower drawdown of 29.24% [4] - An investment of $1,000 in RZG would grow to $1,199 over five years, whereas the same investment in IJT would grow to $1,266 [4] Portfolio Composition - IJT holds 342 stocks, with significant sector weights in technology (20%), industrials (19%), and healthcare (17%) [5] - RZG tracks a "pure" growth methodology with 135 stocks, heavily weighted towards healthcare at 27% [6] - Top holdings for IJT include Arrowhead Pharmaceuticals, Armstrong World Industries, and InterDigital, each under 1.4% of assets [5] - RZG's top positions are Progyny, ACM Research, and ARMOUR Residential REIT [6] Investment Implications - RZG focuses on "pure" growth stocks, using a growth score based on sales growth, earnings change to price ratio, and momentum, leading to fewer total holdings compared to IJT [7] - Over the last 12 months, RZG has outperformed IJT, but over the last five years, IJT's return of 21% surpasses RZG's 13.43% [9] - For short-term gains, RZG may be preferable, while IJT is better for long-term gains, lower expenses, broader exposure, and higher dividend yield [10]