IWM vs. FESM

Last updated Jun 4, 2026

IWM (iShares Russell 2000 ETF) and FESM (Fidelity Enhanced Small Cap ETF) are both Small Cap Blend Equities funds. IWM is passively managed, while FESM is actively managed. Over the past year, IWM returned 39.10% vs 46.73% for FESM. With a 0.98 correlation, they move nearly in lockstep. IWM charges 0.19%/yr vs 0.28%/yr for FESM.

Performance

IWM vs. FESM - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares Russell 2000 ETF (IWM) and Fidelity Enhanced Small Cap ETF (FESM). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, IWM achieves a 17.07% return, which is significantly lower than FESM's 19.64% return.

IWM

• 1D: -1.37%
• 1M: 3.52%
• YTD: 17.07%
• 6M: 15.83%
• 1Y: 39.10%
• 3Y*: 17.88%
• 5Y*: 6.11%
• 10Y*: 10.93%

FESM

• 1D: -1.51%
• 1M: 3.13%
• YTD: 19.64%
• 6M: 19.11%
• 1Y: 46.73%
• 3Y*: —
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

IWM vs. FESM - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
IWM iShares Russell 2000 ETF	17.07%	12.66%	11.38%	12.33%
FESM Fidelity Enhanced Small Cap ETF	19.64%	17.88%	16.22%	12.19%

Correlation

The correlation between IWM and FESM is 0.98 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.98
Correlation (All Time) Calculated using the full available price history since Nov 21, 2023	0.98

The correlation between IWM and FESM has been stable across timeframes, ranging from 0.98 to 0.98 - a consistent structural relationship.

IWM vs. FESM - Sectors Allocation Comparison

Sectors	IWM	FESM
Technology	19.5%	21.6%
Industrials	17.1%	19.1%
Financial Services	15.8%	14.8%
Healthcare	15.8%	15.7%
Consumer Cyclical	7.8%	7.4%
Energy	6.0%	7.2%
Real Estate	5.7%	4.2%
Basic Materials	4.5%	3.5%
Utilities	3.0%	2.0%
Consumer Defensive	2.1%	1.4%
Communication Services	2.0%	3.1%

Return for Risk

IWM vs. FESM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

IWM

IWM Risk / Return Rank: 62
IWM Sharpe Ratio Rank: 59
IWM Sortino Ratio Rank: 59
IWM Omega Ratio Rank: 53
IWM Calmar Ratio Rank: 70
IWM Martin Ratio Rank: 67

FESM

FESM Risk / Return Rank: 76
FESM Sharpe Ratio Rank: 75
FESM Sortino Ratio Rank: 72
FESM Omega Ratio Rank: 66
FESM Calmar Ratio Rank: 84
FESM Martin Ratio Rank: 82

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

IWM vs. FESM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Russell 2000 ETF (IWM) and Fidelity Enhanced Small Cap ETF (FESM). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	IWM	FESM	Difference
Sharpe ratio Return per unit of total volatility	2.05	2.48	-0.43
Sortino ratio Return per unit of downside risk	2.85	3.34	-0.49
Omega ratio Gain probability vs. loss probability	1.34	1.41	-0.07
Calmar ratio Return relative to maximum drawdown	3.56	4.61	-1.05
Martin ratio Return relative to average drawdown	12.64	16.60	-3.95
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

IWM vs. FESM - Sharpe Ratio Comparison

The current IWM Sharpe Ratio is 2.05, which is comparable to the FESM Sharpe Ratio of 2.48. The chart below compares the historical Sharpe Ratios of IWM and FESM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	IWM	FESM	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.05	2.48	-0.43
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.27	—	—
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.48	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.37	1.29	-0.92

Drawdowns

IWM vs. FESM - Drawdown Comparison

The maximum IWM drawdown since its inception was -59.05%, which is greater than FESM's maximum drawdown of -26.93%. Use the drawdown chart below to compare losses from any high point for IWM and FESM.

Drawdown Indicators

	IWM	FESM	Difference
Max Drawdown Largest peak-to-trough decline	-59.05%	-26.93%	-32.12%
Max Drawdown (1Y) Largest decline over 1 year	-11.03%	-10.18%	-0.85%
Max Drawdown (3Y) Largest decline over 3 years	-27.50%	—	—
Max Drawdown (5Y) Largest decline over 5 years	-31.91%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-41.13%	—	—
Current Drawdown Current decline from peak	-1.49%	-1.59%	+0.10%
Average Drawdown Average peak-to-trough decline	-10.77%	-4.79%	-5.98%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.10%	2.82%	+0.28%

Volatility

IWM vs. FESM - Volatility Comparison

iShares Russell 2000 ETF (IWM) and Fidelity Enhanced Small Cap ETF (FESM) have volatilities of 5.75% and 5.64%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	IWM	FESM	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.75%	5.64%	+0.11%
Volatility (6M) Calculated over the trailing 6-month period	13.53%	13.32%	+0.21%
Volatility (1Y) Calculated over the trailing 1-year period	19.20%	18.98%	+0.22%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	22.52%	21.26%	+1.26%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.04%	21.26%	+1.78%

IWM vs. FESM - Expense Ratio Comparison

IWM has a 0.19% expense ratio, which is lower than FESM's 0.28% expense ratio.

Dividends

IWM vs. FESM - Dividend Comparison

IWM's dividend yield for the trailing twelve months is around 0.88%, more than FESM's 0.53% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FESM Fidelity Enhanced Small Cap ETF	0.53%	0.82%	1.08%	0.06%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
IWM iShares Russell 2000 ETF	0.88%	1.04%	1.15%	1.35%	1.48%	0.94%	1.04%	1.26%	1.40%	1.26%	1.38%	1.54%

Frequently Asked Questions

Can I hold both IWM and FESM in my portfolio?

With a correlation of 0.98, IWM and FESM move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, IWM or FESM?

IWM has higher volatility (5.75%) compared to FESM (5.64%). In terms of maximum drawdown, IWM dropped -59.05% vs FESM's -26.93%.

Which ETF is better, IWM or FESM?

On 1-year performance, FESM leads with 46.73% vs 39.10% for IWM. On fees, IWM is cheaper at 0.19% per year. On volatility, FESM has been the lower-risk option at 5.64%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, IWM or FESM?

Over the 1-year period, FESM has performed better with a 46.73% return vs 39.10%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, IWM or FESM?

IWM is cheaper with a 0.19% expense ratio, compared with 0.28% for FESM.

Which ETF pays a higher dividend yield, IWM or FESM?

IWM has the higher dividend yield at 0.88%, compared with 0.53% for FESM.

What is the main difference between IWM and FESM?

They also come from different issuers: iShares and Fidelity. Their fees differ too: 0.19% for IWM and 0.28% for FESM.

Which has better risk-adjusted returns?

FESM currently has the higher Sharpe Ratio (2.48 vs 2.05), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.