Four ETF’s That Capture Big Opportunities In Small Caps

May 5, 2009 9:09am NYSE:DES

stock-ideaFinding the next Apple or Microsoft is like looking for a needle in a haystack. And even though most people will never find either, none of it keeps them from trying. 

Take for example, America’s mutual fund managers. They’re charged with the responsibility of discovering tomorrow’s blue chip stocks. Yet, according to Standard & Poor’s research, over the past five years an astonishing 79.1% and 85.8% of mid and small company stock funds were outperformed by dull mid and small cap stock indexes. Put another way, professional money managers have been buying the wrong stocks!

What about individual investors? It seems like they too are having difficulty in making the right investment decisions.

In its 15th annual survey of investor behavior Dalbar found that 58% of investors bought and sold their investments at the wrong time last year. As a result, many of these same investors experienced substantially worse performance of their investments compared to stock index funds.

The mistake of buying the wrong stocks could’ve easily been avoided if investors just trusted in the indexes and the financial products following them instead of the fund managers that try to beat them and fail.

Let’s evaluate 4 exchange-traded funds or ETFs that can help you to capture the big opportunities in small stocks.

  • iShares Russell 2000 Index Fund (NYSEArca: IWM)
  • SPDR Dow Jones Small Cap ETF (NYSEArca: DSC)
  • Vanguard Extended Market ETF (NYSEArca: VXF)
  • WisdomTree Small Cap Dividend Fund (NYSEArca: DES)

Full Story:  http://www.etfguide.com/commentary/540/4-Ways-to-Capture-the-Big-Opportunities-in-Small-Stocks/



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