IJR tracks the S&P SmallCap 600, which holds small US companies that must meet profitability requirements, including positive earnings over recent periods, to be included. This screen removes many unprofitable companies that are present in broader small-cap indexes such as the Russell 2000, and it has contributed to differences in performance between the two. Small caps are more sensitive to the domestic economy, credit availability and interest rates than large caps and can be more volatile. The fund is cap-weighted and holds several hundred stocks.
