Trade Tracker: Bill Baruch trims the small caps ETF

Watch on YouTube ↗  |  January 08, 2026 at 17:41  |  6:49  |  CNBC
Speakers
Bill Baruch — Investment Committee Member
Jenny Harrington — CEO, Gilman Hill Asset Management
Josh Brown — CEO, Ritholtz Wealth Management

Summary

Bill Baruch explains why he is trimming his IJR position, calling it a rebalance and preferring IWM for a cleaner small-cap breakout. Jenny Harrington and Josh Brown discuss market broadening, rotation away from recent winners, and the distinction between small-cap indexes. Josh Brown says the broadening rotation makes him super bullish on stocks, with financials and industrials cited as alternatives to tech and the Mag-7.

  • Bill Baruch trimmed IJR to roughly 4.25% from nearly 5%, still above his prior 2% weighting.
  • Baruch prefers IWM over IJR for cleaner breakout potential and more materials and biotech exposure.
  • Jenny Harrington likes broadening market leadership and valuation-disciplined non-winner stocks.
  • Panelists differentiate the S&P 600 from the Russell 2000 by profitability and sector composition.
  • Josh Brown says Mag-7 outperformance peaked in December 2024 and 2025 was mixed.
  • Brown is super bullish on stocks as investors rotate into financials and industrials.
  • He argues most portfolios need more non-Mag-7 exposure on the other side of a barbell.
Ideas
Bill Baruch Investment Committee Member 0:42
Trim IJR; prefer IWM's cleaner small-cap breakout.
He owns IJR, the more concentrated small-cap ETF, and doubled exposure in Q4 from 2% to over 4%, but is now trimming back to about 4.25% from nearly 5% as a rebalance and to raise cash ahead of jobs and Supreme Court news. IJR has not made a new record high like IWM, and he sees IWM as the cleaner small-cap breakout because it has more materials and biotech exposure; IJR has better balance sheets but has not followed through.
IJR HIGH
Bill Baruch Investment Committee Member 0:42
Trim IJR; prefer IWM's cleaner small-cap breakout.
He owns IJR, the more concentrated small-cap ETF, and doubled exposure in Q4 from 2% to over 4%, but is now trimming back to about 4.25% from nearly 5% as a rebalance and to raise cash ahead of jobs and Supreme Court news. IJR has not made a new record high like IWM, and he sees IWM as the cleaner small-cap breakout because it has more materials and biotech exposure; IJR has better balance sheets but has not followed through.
IWM HIGH
Jenny Harrington CEO, Gilman Hill Asset Management 2:55
Broadening rotation supports reasonably valued equities.
She likes the current market complexion because leadership is broadening: the last couple of years saw money concentrated in a small group of winners, while other companies in valuation-disciplined growth and equity income strategies sat fallow with compelling valuations and earnings growth. She thinks prior winners should pause rather than crash, and sees reasonableness returning; investors must do valuation work rather than chase winning trades.
SPY MED
Josh Brown CEO, Ritholtz Wealth Management 5:17
Broadening rotation favors stocks, financials, industrials.
He is super bullish on stocks because the AI and data-center focus hid a broader rotation that is now following through. Mag-7 outperformance versus the S&P 493 peaked in December 2024, 2025 was mixed and the Mag-7 did not materially beat the S&P 500. Every sector except tech was positive on the day, with no tech-specific news, as investors diversify into other areas such as financials and industrials, and most investors need more exposure on the non-Mag-7 side of a barbell.
SPY XLF XLI HIGH
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This CNBC video, published January 08, 2026, features Bill Baruch, Jenny Harrington, Josh Brown discussing IJR, IWM, SPY, XLF, XLI. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Bill Baruch, Jenny Harrington, Josh Brown  · Tickers: IJR, IWM, SPY, XLF, XLI