The iShares Russell 2000 ETF surpasses Invesco QQQ this year, driven by a small-cap rally amid tech dominance.
The iShares Russell 2000 Small-Cap ETF (IWM) has returned 18.22% year to date, outpacing the Invesco QQQ ETF (QQQ), which delivered 17.57%. The small-cap fund also led over the past year with a 41.75% total return, defying recent trends favoring large-cap tech stocks.
Historically, QQQ has outperformed IWM, posting 21.8% annualized returns over the past decade. However, IWM’s lower valuation—a P/E ratio of 20.22, a 37% discount to broader markets—may attract investors seeking growth potential beyond mega-cap tech.
The shift highlights a rotation into smaller companies, though long-term performance disparities remain significant.