3 Small Cap ETFs To Watch [iShares Russell 2000 Index (ETF)]

Vanguard Small-Cap Value ETF (NYSEARCA:VBR)

This fund provides exposure to the value segment of the U.S. small cap market by tracking the CRSP US Small Cap Value Index. It holds a large basket of 811 stocks in its portfolio, which is widely spread across individual security. None of the holdings make up for more than 0.5% of assets in the basket.

In term of sector exposure, the fund is dominated by the top two sectors – financials and industrials – at 28.4% and 21.6%, respectively. Consumer services, technology and consumer goods round off the top five (read: 3 Excellent Value ETFs Poised to Outperform).

VBR is quite popular with AUM of more than $4 billion and trades in good average daily volume of about 162,000 shares. Further, the ETF is one of the low cost choices in the small cap space, charging 9 bps in fees per year from investors. The fund has added about 3.5% year-to-date and has a Zacks Rank of 3 or ‘Hold’ rating with Medium risk outlook.

Bottom Line

Investors should note that these three products have shown strong resilience to the sharp downturn in the small cap space. This trend will likely continue in the near future given investors desire to shift from small cap stocks to larger, more stable companies.

Further, small caps are considered the barometer of domestic economy and are less susceptible to global economic trends. As the economy gradually improves and investor panic on high-growth securities subside, small caps would lead the market rally, making the above-mentioned ETFs lucrative choices.

This article is brought to you courtesy of Sweta Killa.

Pages: 1 2

Leave a Reply

Your email address will not be published. Required fields are marked *