##  [# ETF Watch: iShares Debuts Small/Midcap Fund](/sections/daily-etf-watch/etf-watch-ishares-debuts-smallmidcap-fund) 

 

# ETF Watch: iShares Debuts Small/Midcap Fund

 

 

The new fund tracks the Russell 2500 covering the small- and midcap spaces.



 

 

 

 

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[By ETF.com Staff](/contributors/etfcom-staff)

 Jul 07, 2017

 Edited by: ETF.com Staff

 

 

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Today BlackRock’s iShares unit is rolling out an ETF that targets the 2,500 stocks ranking below the largest 500 stocks in the U.S. market. The [iShares Russell 2500 ETF (SMMD)](https://www.sec.gov/Archives/edgar/data/1100663/000119312517152500/d384016d485bpos.htm) fills in a void in the iShares lineup, covering both the small- and midcap space.

The fund comes with an expense ratio of 0.15% and lists on the Bats exchange, which is owned by ETF.com’s parent company, CBOE.

“The Russell 2500 has long been a staple for institutional investors, but lacked a turnkey ETF implementation,” said Martin Small, head of U.S. iShares at BlackRock.

The product can roughly serve as an S&amp;P 500 completion fund even though the S&amp;P 500 Index does not comprise the 500 largest stocks in the country based on market capitalization; rather, they’re chosen by committee.

**Paired Exposure Common**

For a long time, it was common for investors—in both the retail and institutional spaces—to pair an exposure to the S&amp;P 500 Index with an exposure to the small-cap Russell 2000 Index. However, the problem with that suggests that roughly 500 stocks of significant size are overlooked.

Enter the Russell 2500 Index, which has become a popular index with the institutional space over the years, as institutional managers have gravitated away from the Russell 2000 as a benchmark for active portfolios.

That means there’s likely a ready audience in the institutional space where ETFs are a popular tool for equitizing cash, while retail investors may find SMMD useful for broadening the exposure of their portfolios beyond the large-cap segment.

*Contact Heather Bell at <hbell@etf.com>.*



 

 

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 Related Topics  [Small Cap](http://www.etf.com/topics/small-cap) 

 [Midcap](http://www.etf.com/topics/midcap) 

 [Equity](http://www.etf.com/topics/equity) 

 [U.S.](http://www.etf.com/topics/us)