iShares Russell 2000 Growth ETF Price & Performance (IWO)

Major U.S. indices, including the S&P 500 and Nasdaq, recently hit all-time highs, yet investor sentiment remains bearish, reminiscent of 2022 lows. Analysts point to a significant rotation as investors reduce exposure to growth stocks like the iShares Russell 2000 Growth ETF and shift toward value-oriented options.12

The Russell 2000 index has dropped approximately 10% from its late-2024 peak, reflecting negative investor and executive sentiment. Factors such as persistent inflation, high interest rates, and economic uncertainty are pressuring small-cap companies, leading to downgraded growth prospects and increased bearish positioning in the sector.34

Recent ETF fund flows reveal a shift toward fixed-income and international equity funds, with U.S. equity funds like the iShares Russell 2000 ETF seeing significant outflows. Concerns over inflation and trade tensions are driving the trend, as investors seek safer assets amidst a volatile economic environment.56