iShares Russell 2000 ETF (IWM) Top 25 Holdings

The iShares Russell 2000 ETF (IWM) is one of the most widely used vehicles for gaining exposure to small-cap U.S. companies. With thousands of holdings spread across various industries, it offers investors the opportunity to own the next generation of potential mid- and large-cap leaders. Small caps bring more volatility, but they also offer diversification beyond the large tech names that drive the big tech indices.

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IWM is also popular among investors looking for higher growth potential, tactical exposure, or a complement to S&P 500 funds. With a relatively low expense ratio and deep liquidity, it serves as both a trading tool and a core allocation for those betting on U.S. small-cap strength.

Of course, small-caps trade differently than the mega-caps. The top holdings of IWM comprise only a fraction of the portfolio, with none exceeding 0.84%. That means stock-specific moves can create pockets of volatility, but the fund’s broad base balances things out. To get a sense of where leadership sits today, here’s a look at IWM’s top holdings.

1. Credo Technology (CRDO)

Credo Technology focuses on high-speed connectivity solutions, making it a small but meaningful player in the data infrastructure space. Its products enable faster and more efficient transmission of data across cloud and networking systems, an area with secular tailwinds as traffic continues to explode.

The company has built momentum by targeting hyperscalers and networking providers who need scalable, cost-effective solutions. While competition is intense, Credo’s focus on energy efficiency and speed helps it carve out a differentiated niche.

For IWM, Credo represents the kind of early-stage company that small-cap investors seek: not yet dominant, but plugged into a big trend with room to expand. Even at less than 1% weight, its success or struggles give a flavor of how innovative small-caps can shape the portfolio.

2. IonQ (IONQ)

IonQ sits at the frontier of quantum computing, positioning itself as a future enabler of workloads that traditional chips can’t handle. It’s still in the commercial build-out phase, with revenues small compared to its long-term ambitions; however, investor interest is high due to its technological edge.
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The company bets that quantum-as-a-service will eventually complement or even transform cloud computing. With partnerships forming across research, cloud providers, and enterprise customers, IonQ is trying to build an ecosystem early, similar to how NVIDIA built CUDA to lock in developers.

For IWM, IonQ captures the speculative upside of small-cap investing. It won’t move the ETF by itself, but its presence highlights how the Russell 2000 provides exposure to bleeding-edge technologies years before they reach the mainstream.

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3. Bloom Energy (BE)

Bloom Energy develops solid oxide fuel cells that generate cleaner, more reliable power, tapping into the transition away from fossil fuels. Its systems appeal to businesses and governments seeking distributed, low-carbon energy solutions, positioning it at the intersection of industrial and sustainability.

Recent growth has stemmed from expanding deployments and forging partnerships in markets seeking alternatives to traditional grid power. While adoption can be lumpy, the long-term demand for energy resilience and decarbonization plays to Bloom’s strengths.

For IWM investors, Bloom highlights the ETF’s exposure to green energy trends. Unlike megacaps, where energy is a small slice of the pie, small-cap ETFs lean more heavily on companies like Bloom, which can surge if the clean energy transition accelerates.

What This Mix Means for IWM

IWM is structured differently from large-cap ETFs like VOO or SPY. Instead of top holdings making up 20–30% of the fund, IWM’s top 25 don’t even crack 10% of the portfolio combined. That means no single company drives the bus, the story is in the breadth.

This creates both benefits and drawbacks. On the upside, you’re not over-exposed to a handful of megacaps. On the downside, small-cap indexes can lag during periods when large tech companies dominate market performance. For investors, that trade-off is key to understanding how IWM fits into a portfolio.

Key Insights: How IWM Performs Differently

• Broad spread: No company holds more than 0.84% weight, keeping IWM far less concentrated than large-cap peers.
• Innovation exposure: The fund captures early-stage and niche players, such as IonQ, Bloom Energy, and Hims & Hers, which are rarely represented in larger ETFs.
• Volatility factor: Small-caps tend to swing more significantly in both directions, meaning IWM tends to shine in risk-on markets and lag when investors flock to megacap safety.

Why IWM Is So Effective for Investors

IWM remains one of the most effective ways to access small-cap U.S. equities. Its breadth ensures diversification, while its focus on younger, smaller, and often more innovative firms provides investors with a significantly different return profile compared to large-cap ETFs.

This comes with higher volatility and more idiosyncratic risk, but also exposes investors to future potential leaders in tech, healthcare, and industrials. While funds like VOO concentrate on today’s proven winners, IWM offers a lottery ticket basket, comprising hundreds of smaller bets with room to grow.

For many portfolios, combining IWM with a large-cap ETF creates a balance between stability and growth optionality. Investors comfortable with the ride may find that small-caps add both diversification and long-term upside.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!