The iShares Core U.S. Small-Cap ETF (IJT) has significantly outpaced the Invesco S&P SmallCap 600 Pure Growth ETF (RZG) over the past 12 months, reflecting differing sector exposures and investment strategies. Despite both targeting small-cap equities, their performance divergence underscores shifting investor preferences.
- IJT returned 17.4% over the past 12 months, outperforming RZG’s 5.8%
- IJT holds $19.3 billion in AUM, compared to RZG’s $4.1 billion
- RZG’s focus on growth stocks left it exposed during market shifts
- IJT’s expense ratio is 0.07%, significantly lower than RZG’s 0.45%
- Sector exposure: IJT broadly diversified across financials, tech, and consumer; RZG concentrated in growth-oriented small caps
- Performance gap reflects broader trends in value vs. growth rotation
The iShares Core U.S. Small-Cap ETF (IJT) has delivered a 17.4% return over the last 12 months, compared to RZG’s 5.8%, marking a nearly 12-percentage-point gap in performance. This stark contrast stems from IJT’s broad-based exposure across financials, consumer discretionary, and technology sectors, which have shown resilience amid moderate market volatility. RZG, focused exclusively on growth-oriented small caps within the S&P SmallCap 600 Index, has struggled as value stocks rebounded and interest rate expectations stabilized. IJT’s strategy of tracking a cap-weighted index of small-cap U.S. companies has provided diversification benefits and lower turnover, leading to more stable returns. In contrast, RZG’s concentrated tilt toward high-growth stocks—particularly in tech and consumer services—left it vulnerable during periods when growth narratives faced headwinds. The ETF’s top holdings include names like Lumentum Holdings (LUMN) and Pacer Cashflow Positive Companies ETF (PCF), which experienced price corrections in late 2025. Market analysts note that the performance gap may influence allocation decisions among institutional and retail investors seeking small-cap exposure. As of January 2026, IJT held approximately $19.3 billion in assets under management, while RZG managed $4.1 billion, suggesting greater scale and liquidity in IJT. The disparity raises questions about the sustainability of pure growth strategies in a regime of elevated rates and slowing earnings momentum for some cyclical sectors. Investors tracking small-cap dynamics may view IJT as a more balanced entry point, especially given its lower expense ratio of 0.07% versus RZG’s 0.45%. The divergence highlights how sector concentration and strategic focus can drastically affect outcomes even within similar asset classes.