IWC ETF

The iShares Micro-Cap ETF has not performed as well as other small, mid, and large-cap funds, achieving a total return of just 103.5% over the past decade. Its portfolio mainly consists of value stocks (52%) and has less focus on growth stocks (20%), which affects its overall performance. Additionally, the fund's limited investment in technology stocks (12.5%) reduces its potential for growth, especially since the tech sector is rapidly expanding due to important trends.

The iShares Micro-Cap ETF provides passive exposure to U.S. micro-cap stocks, minimizing the risks associated with individual stock picking. Despite the underperformance, IWC provides diversification and, in my opinion, the potential for alpha in the future in the micro-cap market. The lowering of the Fed's interest rates has become inevitable, and this could create value in the micro-cap segment.

IWC invests across a portfolio of the smallest US publicly traded companies. The fund has underperformed historically and is lagging during the current bull market. Micro-cap stocks are important, but IWC's strategy fails to impress.

The current bull market has been driven by large-cap momentum, but if you believe small-caps will lead the next phase, consider investing in the iShares Micro-Cap ETF. IWC provides exposure to micro-cap stocks, which have the potential for significant returns but also come with higher risks due to their smaller size and limited resources. The fund holds a diversified portfolio of about 1,500 micro-cap stocks, with the biggest allocation in the healthcare sector.

Microcap investing can lead to extraordinary returns, but retail investors are at a disadvantage due to lack of information and coverage. The iShares Micro-Cap ETF suffers from this information disadvantage and has modest long-term returns. Investors should seek professional advice from experts like the Royce Micro-Cap Trust, which has outperformed the IWC ETF on all time frames.

The iShares Micro-Cap ETF is a simple micro-cap index ETF. The fund provides diversified exposure to a less common equity niche, and sports a cheap valuation. It seems that IWC currently trades with a cheap valuation but there is a catch.

iShares Micro-Cap ETF focuses on the smallest stocks in the market, holding over 1,500 stocks, including biotech companies and pre-revenue companies. Microcap stocks are believed to underperform during bear markets and outperform during secular bull markets, but this is only true under certain circumstances. The fund is overweight in financial stocks, particularly regional banks, which could face risks in the event of a credit crunch.