IWM and GDX Robots - September 19, 2011

[Timothy Clontz]

The biggest different between IWM and the others is the way it's constructed. IWM selects about 650 stocks out of the Russel2000 index based on fundamentals. As such, it is not cap weighted and not a true "index" in the classical sense. Rather, it is a picture of fundamental-breadth activity and would be the most influenced by real traders in its underlying stocks. I note that rather frequently my own fundamental selections will appear in IWMs top 10 holdings, even though they are small caps.

In other words, it gives a balanced picture between index traders and real "buy and hold" investors -- for a better snapshot of the market as a whole.