"The iShares Russell 2000 ETF holds 1,948 companies and tracks the Russell 2000, which has no profitability requirement, with roughly 40% of its holdings losing money."
"The iShares Core S&P Small Cap ETF holds 567 companies and tracks the S&P SmallCap 600, requiring positive earnings for inclusion, which changes the fund's character significantly."
The S&P 500 has declined through late March, while small-cap stocks have shown relative strength. The iShares Russell 2000 ETF is down 1.60% year-to-date, whereas the iShares Core S&P Small Cap ETF is up 0.19%. This divergence suggests a rotation from mega-cap technology to smaller, domestically focused companies. The Russell 2000 includes many unprofitable companies, while the S&P Small Cap 600 requires positive earnings for inclusion, significantly affecting their performance and characteristics.
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