For a man who sells a lot of ETF products, BlackRock's head of iShares americas institutional business Daniel Gamba is remarkably blas� about the subject of the active versus passive ideological wars.

"As I was coming here, I was thinking over this big question. Is there going to be a war of passive versus active, and do we care. We actually don't care," Gamba told a room full of financial press folks during an event at Russell Investments that updated the public on the latest trends in the small cap space.

The event, formerly titled Small Cap Summit 2014, included a number of important folk, such as Russell's chief market strategist Stephen Wood, Russell investment strategist David Koenig, and Steven DeSanctis, head of small cap strategy at BofA Merrill Lynch Global Research. Also in attendance was Ken O'Keefe, managing director, business development and market solutions for Russell Indexes. (O'Keefe spoke to MFWire in December outlining some of Russell's initiatives in smart beta)

But it was Gamba who had a lot to say on the subject of product, in particular specifically refining products so that they become useful to finance wonks of all types, no matter what their particular opinion on passive, aggressive, smart beta, what have you.

Illustrating some of the principles behind iShares' strategy for marketing its products, Gamba drilled down on the iShares Russell 2000 Value ETF

For example, IWN, created 14-years ago in May 2000, now has $30 billon in assets. In fact, Gamba said that IWN represents close to 30% of total ETFs in the U.S. small cap space, which is $93 billion. In 2013, we had the highest level of flows on the IWN index across the previous five years, add $6 billion of flows into the IWN.

"It is clearly one of the the most utilized instruments for exposure in U.S. small caps," he said.

A key element of the product's popularity is its liquidity. For example, Gamba noted that ETFs are about 7 percent of small cap trading per day, IWN is $5 billion per day. In other words, 70 percent of small caps is traded through IWN.

Gamba then drilled down on those who use IWN. They are:

U.S. Pension Funds

Pensions use IWN. for example, a corporate pension plan investing in IWN would lend out the instrument to shooters to make additional spread or returns on the security. The loan and lend wrinkle of IWN has allowed investors to have greater returns over Russell 2000 for a number of years.

We also have pension plans who use IWN as a cash equitization vehicles. Normally pension plans need to keep a buffer of liquidity. They give benefits, part of the cash is invested. and part is given out to benefits. They need to have liquidity. They use a portion on ETFs, maintaining exposure on the markets.

2. Asset Managers and Hedge Fund Managers

Asset allocators who want exposure to IWN. A big trend into asset allocation through ETFs. These are the biggest use of ETFs.

Asset allocators, who want exposure to IWN, a big trend into assets allocation through ETFs. Asset allocators, asset managements, hedge funds managers and a growing category known as ETF investment strategists. ETF strategists are becoming a big part of asset allocation. They look for a highly liquid ETF for exposure to ETFs. There are active managers who generate alpha through asset allocation.

Hedge fund managers and managers of market neutral or market hedging products, need ETFs to hedge some of the positions they take. In these cases, some clients use the futures of the Russell 2000. They also use IWN to short some of the positions.

3. RIAs

RIAs are also using ETFs as an asset allocation. IWN is becoming a preferred vehicle for exposure to small caps.

4. Non U.S. Investors, such international pension plans

Non U.S. investors. International pension plans who use IWN. Examples include, pension plans in Mexico and Chile, they use this product to gain exposure to small caps.

There are also tactical players, those who trade in and out of the markets.

Gamba said that "people are looking at small caps as an active play but because the instrument is used so broadly by active managers, they will continue to use a passive instrument to get active alpha through the ETF."

"We are very positive about IWN," he said.

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