A Russell 2000 Bull Market Could Be Coming: 1 Spectacular BlackRock ETF to Buy Hand Over Fist Before It Gets Here

BlackRock and iShares Russell 2000 ETF Overview - BlackRock is the parent company of iShares, which manages $3.3 trillion in assets across more than 1,400 ETFs [1] - The iShares Russell 2000 ETF (IWM) tracks the performance of the Russell 2000 index, which includes approximately 2,000 of the smallest companies listed on U S stock exchanges [4] - The Russell 2000 index has not yet closed above its previous record level from 2021, despite recent highs in major market indexes like the S&P 500 [4] Russell 2000 Composition and Sector Weighting - The Russell 2000 is more balanced compared to the S&P 500, with industrials being the largest sector at 18 9%, followed by healthcare at 17 4%, and financials at 17 2% [5] - The top 10 holdings in the iShares Russell 2000 ETF account for just 4 06% of its total value, with no single stock having a weighting of 1% or more [9] - Companies in the Russell 2000 typically conduct most of their business inside the U S, such as Sprouts Farmers Market, which operates 410 grocery stores across the country [9] Interest Rate Sensitivity and Debt Structure - 38% of the debt held by Russell 2000 companies has a floating interest rate, compared to just 6% for S&P 500 companies, making smaller companies more sensitive to interest rate changes [6] - Falling interest rates and potential further cuts in 2025 could provide significant tailwinds for the Russell 2000, as smaller companies often rely on debt financing for growth [2][10] Potential Catalysts for Russell 2000 Performance - The iShares Russell 2000 ETF delivered a return of 13 1% in 2017, the first year of Trump's previous term, significantly higher than its average annual return of 7 9% since its inception in 2000 [7] - Business-friendly policies from the incoming Trump administration, including potential deregulation and a proposed corporate tax rate of 15% for domestic manufacturers, could benefit small U S companies [3][10] - A gain of 8 9% would be enough for the Russell 2000 to close at a record high, potentially triggering a new bull market [8][11] Outlook for 2025 - With a similar policy agenda to Trump's previous term and potential further interest rate cuts, the iShares Russell 2000 ETF has a strong opportunity to outperform in 2025 [11] - A 13 1% gain in 2025 would be sufficient to propel the Russell 2000 into a new bull market [11]