Investors are weighing their options between the iShares Core S&P 500 ETF and the iShares Russell 2000 ETF. This essentially boils down to a choice between the reliable, tech-heavy large-cap stocks and the more unpredictable small-cap stocks.
Both ETFs provide broad market exposure, yet they focus on drastically different parts of the market. The Russell 2000 tracks smaller companies, whereas the S&P 500 targets larger, more established firms, making IVV a common choice for those looking for growth and stability through large-cap stocks.
Snapshots (cost and size)
| metric | I.W.M. | IVV |
|---|---|---|
| Publisher | ishares | ishares |
| expense ratio | 0.19% | 0.03% |
| 1 year return (as of May 13, 2026) | 36.9% | 27.8% |
| dividend yield | 0.9% | 1.1% |
| beta | 1.30 | 1.00 |
| market cap | $78 billion | $828 billion |
Beta assesses the price volatility relative to the S&P 500, calculated from five years of monthly returns. The one-year return reflects the total for the following year. Dividend yield is based on the trailing twelve months.
There’s a noticeable cost difference here. The iShares Core S&P 500 ETF has an expense ratio of just 0.03%, quite lower than the 0.19% for the Russell 2000 ETF. Also, the S&P 500 ETF seems to provide better yields for those looking for income.
Comparing performance and risk
| metric | I.W.M. | IVV |
|---|---|---|
| Maximum drawdown (5 years) | (31.9%) | (24.5%) |
| $1,000 growth in 5 years (total return) | $1,393 | $1,944 |
What’s inside
The largest holdings in the iShares Core S&P 500 ETF include: Nvidia at 8.6%, Apple at 6.9%, and Microsoft at 4.7%. The fund consists of 508 securities, predominantly in the tech sector (37%), followed by financial services (11%) and communications (just under 11%).
On the flip side, the iShares Russell 2000 ETF’s main sectors are industrials (19%), tech (18%), and healthcare (16%). Notable positions include Bloom Energy (1.9%), Credo Technology (0.9%), and Fabrinet (0.7%). Both funds launched in 2000 and have demonstrated considerable performance history.
What this means for investors
Both iShares ETFs have shown strong long-term results, but investors need to evaluate their specific goals. Each fund serves a different purpose in diverse portfolios.
Beyond just costs and sector focus, the performance diverges quite a bit—an investment of $1,000 in IVV is now valued at approximately $4,300, compared to IWM at $2,933.
This seems to reflect the cyclical popularity of small-cap stocks, which is something worth considering. The S&P 500 may face some volatility, yet the Russell 2000 tends to see more pronounced price movements and longer dips in performance due to its focus on smaller companies.
However, after several years of underperformance, small-cap stocks are starting to see a resurgence. IWM has actually outperformed IVV over the past year, and this trend might continue in the next few years.
In conclusion, the iShares Russell 2000 ETF could be a better option for those already invested in large-cap stocks seeking small-cap exposure. Conversely, for beginners, the iShares Core S&P 500 ETF is generally more suitable, as it tends to deliver more consistent performance by focusing on top-tier companies.
