SPSM vs IJR: Which Small-Cap ETF Offers Better Value?
Both track identical indexes with nearly matching returns, but one charges half the fee while delivering a higher dividend yield.
iShares Core S&P Small-Cap ETF (IJR) and State Street SPDR Portfolio S&P 600 Small Cap ETF (SPSM) are two small-cap ETFs that provide exposure to U.S. small-cap stocks. Despite their similarities in investment focus, the two funds differ mainly in their expense ratios, liquidity, and assets under management.
Investors often turn to small-capitalization stocks for growth potential that large-cap stocks do not offer. However, these smaller companies generally come with higher volatility. These funds are popular tools for investors looking to capitalize on the size premium, which refers to the historical tendency of smaller companies to outperform larger ones over extended periods.
Both IJR and SPSM track the S&P SmallCap 600 Index. Yet, their histories and fee structures vary. The beta metric measures an investment's price volatility relative to the S&P 500. Beta is determined from monthly returns over the available fund history, up to five years. The 1-year return represents the total return over the trailing 12-month period. Dividend yield is calculated based on the trailing-12-month distribution yield.
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