Small-cap exchange-traded funds saw investors weigh diversification against stronger near-term results as two popular options—State Street’s State Street SPDR Portfolio S&P 600 Small Cap ETF and iShares’ iShares Morningstar Small-Cap ETF—came into focus. As of June 26, 2026, SPDR’s fund was trading at $57.30, while the iShares fund was at $74.93, with the SPDR ETF also showing a higher trailing 12-month total return. The comparison centers on how each fund builds its portfolio—specifically, the number of holdings, sector exposure, and liquidity considerations.
Key takeaways
- Price move: As of June 26, 2026, SPDR’s small-cap ETF traded at $57.30 versus iShares’ $74.93.
- Catalyst: The key driver is portfolio construction—SPDR tracks the S&P SmallCap 600 with 607 stocks, while iShares holds 1,586 securities under a broader small-cap benchmark.
- Performance gap: SPDR delivered a 36.9% trailing 12-month total return versus 30.7% for iShares.
- Key implication: iShares offers wider diversification but comes with much smaller assets under management, which can translate into lower trading activity.
- Risk profile: Both ETFs show similar downside over five years, with max drawdown of (27.9%) for SPDR and (29.9%) for iShares.
Portfolio design: fewer names vs. broader diversification
Both funds are designed to provide core exposure to the U.S. small-cap market, but they take different approaches to indexing and breadth. iShares tracks a broad benchmark of smaller U.S. companies and holds 1,586 securities, which substantially increases the number of underlying positions compared with SPDR’s 607-stock portfolio.
Sector allocations are broadly similar in their composition, with industrials leading iShares at 18%, followed by technology at 16% and financial services at 16%. SPDR’s top sectors are technology at 17%, financial services at 17%, and industrials at 15%. Neither fund appears highly concentrated by position size; the largest iShares holding is at 0.38%, while SPDR’s largest position is at 0.64%.
Costs, income, and the near-term performance difference
Expense ratios are close. The SPDR ETF charges 0.03%, while iShares charges 0.04%, a difference of just one basis point. On income, SPDR offers a slightly higher trailing dividend yield: 1.4% versus 1.3% for iShares.
Where the divergence becomes more apparent is in recent results. According to the data provided as of June 26, 2026, the SPDR fund posted a 36.9% trailing 12-month total return, while the iShares fund returned 30.7% over the same period. Beta readings—calculated relative to the S&P 500 using five-year monthly returns—were 0.99 for SPDR and 1.03 for iShares, suggesting broadly comparable sensitivity to broader market moves.
Risk and drawdowns: both funds have delivered similar downside
In terms of longer-term volatility and stress behavior, the drawdown measures are also relatively close. The maximum drawdown over five years was (27.9%) for SPDR and (29.9%) for iShares, indicating that both portfolios have experienced meaningful declines during adverse market periods.
A simple growth comparison based on total return over five years shows SPDR ending higher on the same starting basis: the “growth of $1,000 over 5 years” metric reached $1,403 for SPDR and $1,360 for iShares, reinforcing the performance edge observed over the trailing year.
Liquidity and fund scale: a major practical difference
Beyond index construction and returns, fund size is an investor-facing issue. SPDR’s assets under management total $16.9 billion, while iShares’ AUM is $285 million. That scale gap matters because the iShares fund is likely to have very low average trading volume relative to larger peers, which can affect execution quality for investors entering or exiting positions—particularly in less liquid market conditions.
According to the figures provided, both ETFs were launched with different timelines—iShares in 2004 and SPDR in 2013—but the more immediate operational difference for investors is the disparity in current assets and expected liquidity.
Notable holdings: exposure to small-cap growth and healthcare among others
The leading positions offer additional context for what investors are actually buying inside these broad small-cap sleeves. iShares’ largest holdings include Sterling Infrastructure at 0.38%, Okta at 0.33%, and Guardant Health at 0.3%. SPDR’s top holdings include Formfactor at 0.64%, Molina Healthcare at 0.62%, and Brightspring Health Services at 0.61%.
While these weights are not large enough to imply concentration risk, they do indicate that each fund’s “curated” slice of the market can tilt toward different pockets of small-cap exposure—one reason performance can diverge even when both are treated as small-cap core holdings.
Bigger picture for small-cap ETF investors
Investors comparing the two funds are essentially balancing three linked factors: breadth, recent performance, and tradability. iShares offers substantially greater diversification by number of holdings, but the fund’s much smaller asset base suggests lower liquidity. SPDR delivers stronger trailing-year performance in the provided data, while also maintaining a large, liquid AUM profile.
For investors deciding between the two, the key takeaway is that both track small-cap benchmarks and show broadly comparable overall risk measures, but the “best fit” can depend on whether diversification through more holdings is worth potentially lower liquidity and whether the stronger recent return trend in SPDR matters for the portfolio time horizon.
Looking ahead, investors may want to monitor upcoming small-cap catalysts such as earnings from index-heavy names and broader macro drivers that tend to shape small-cap performance—particularly interest-rate expectations and credit conditions. Updated ETF performance and any benchmark-related tracking updates could also affect how these funds behave relative to each other as new data rolls in.
