Could Investing $10,000 in IWM Make You a Millionaire?

By Ben Gran – Apr 10, 2026 at 2:00AM ESTKey PointsThe iShares Russell 2000 ETF has delivered average annual returns of 8.06% for almost 26 years. This small-cap stock ETF offers diversification in smaller companies with potential for future growth. If you invest $10,000 in IWM, your money could grow to $1 million in 60 years. If you're feeling nervous about recent downturns in tech stocks and want to invest your money into a different part of the market, the iShares Russell 2000 ETF (IWM +0.57%) might be on your radar. This small-cap stock ETF gives you exposure to nearly 2,000 small publicly traded U.S. companies. Buying small-cap stocks can be a good strategy to diversify your portfolio, especially if you're heavy on major tech names. But can IWM make you a millionaire? One downside to this small-cap stock ETF is that it has underperformed the S&P 500. Let's see what it takes to become a millionaire by investing in IWM and why it might not be the best choice for investors who want long-term growth. Image source: Getty Images. IWM: Nearly 26 years of annual returns averaging 8.06% The iShares Russell 2000 ETF began trading for investors on May 22, 2000. That means the fund has a track record of almost 26 years since its inception date. In the past (nearly) 26 years, IWM has delivered average annual returns of 8.06%. That's a lower growth rate than the S&P 500 index's long-term average of 10% annual returns. While 8.06% average annual growth can still make you a millionaire, it will take a long time. Let's say you invested $10,000 in IWM and the ETF keeps delivering its average annual return of 8.06%, year after year, and you leave your money invested to grow from compounding. After 30 years, you'd have $102,317. After 45 years, you'd have $327,283. And after 60 years, you'd finally get to $1 million. That's an awfully long time to wait -- longer than most people's investing lifetimes. ExpandNYSEMKT: IWMiShares Trust - iShares Russell 2000 ETFToday's Change(0.57%) $1.49Current Price$261.96Key Data PointsDay's Range$258.78 - $262.9052wk Range$178.58 - $271.60Volume152K Why IWM might not be the best choice for investors So why do people buy small-cap stocks? A big reason is diversification. Sometimes investors want to include a wider range of stocks in their portfolios. If you're worried about a possible artificial intelligence (AI) bubble or feel like the S&P 500 and Nasdaq-100 have gotten too top-heavy with just a few major tech stocks, owning small-cap stocks could be a good defensive play. IWM contains thousands of stocks that might become tomorrow's fastest-growing companies. The ETF's top holdings by sector include: Industrials (18.3% of the fund) Healthcare (17.4%) Financials (17.1%) Information technology (14.7%) Consumer discretionary (8.3%) The fund charges an expense ratio of 0.19%, which includes a management fee. Buying this small-cap ETF can offer you exposure to different parts of the stock market that might be less risky in case of an AI bubble bursting or a bear market in tech stocks. But one big risk of IWM is that it will grow too slowly to make you a millionaire before you retire. Most investors who want long-term growth should buy other diversified ETFs, such as S&P 500 index funds.Read NextMar 31, 2026 •By Robin Hartill, CFPHow to Buy Peloton Stock (PTON) in 2026Mar 29, 2026 •By Katie BrockmanIWM vs. QQQ: How Small-Cap Diversification Compares to Large-Cap Growth for InvestorsMar 25, 2026 •By Jake LerchGo Big or Go Small? IWM Targets Small-Cap Stocks; MGK Owns Big Tech StocksApr 10, 2026 •By Trevor JennewineThis Vanguard Index Fund Is Absolutely Crushing the S&P 500 This YearApr 10, 2026 •By Sean WilliamsA Huge Move May Be Imminent for Stocks, With the Most Consequential Data Release of the Year Just Hours AwayApr 10, 2026 •By Alex CarchidiIs XRP a Legitimate Long-Term Investment or Just a Speculative Trade?About the AuthorBen Gran is a contributing analyst at The Motley Fool, covering publicly traded companies in consumer goods, technology, transportation, industrials, materials, and energy. He is a longtime freelance finance writer with 15+ years of experience writing for publications like Forbes Advisor, Motley Fool Money, and Business Insider, and corporate websites of Prudential and regional banks. Ben also ghostwrites books and bylines for CEOs and other business thought leaders. He earned his B.A. in History from Rice University. Ben is an avid international traveler and has visited 12 countries (and counting).TMFBenjaminGranStocks MentionediShares Trust - iShares Russell 2000 ETFNYSEMKT: IWM$261.96(+0.57%)+$1.49S&P 500 IndexSNPINDEX: ^GSPC$6,824.66(+0.62%)+$41.85*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.