Investors Are Turning To Small and Mid Cap ETFs In 2010

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March 15, 2010 3:50pm NYSE:IJR NYSE:MDY

“An ETF for U.S. small-cap stocks, iShares S&P Small Cap 600 Index Fund (IJR), set a fresh 52-week high on Friday and is trading at levels last seen right around Lehman Brothers filed for


 bankruptcy in September 2008. Small and mid-sized stocks have outpaced large-cap shares measured by the SPDR S&P 500 ETF (SPY) by a wide margin so far in 2010, and since the March bottom last year,” John Spence Reports From MarketWatch.

Spence goes on to say, “The iShares S&P Small Cap 600 Index Fund was up 8.5% for the year-to-date period through March 12, while the SPDR S&P Mid Cap (MDY) gained 8.2%, and the SPDR S&P 500 ETF added 3.6%. With small and mid-cap stocks essentially unchanged from where they traded right before the Lehman meltdown, this recovery is “considered an important step for stocks and indexes that have fallen steeply in price,” said ConvergEx Group chief market strategist Nicholas Colas in a March 11 note.”

“By recovering the entire amount of lost principal, the stock price is signaling that whatever fundamentals created the meltdown have been resolved,” he wrote. “If the asset can stay above this price, it becomes technical support for future moves higher.”

“The outperformance of smaller and lower-quality stocks is typical in the first year of a bull market. So what tends to happen in the second year?” Spence Reports.

“Historically, small-cap stocks continue to beat large-caps, cyclical sectors outperform defensive ones, and a rising tide once again lifts all boats,” S&P Equity Research Chief Investment Strategist Sam Stovall wrote in a March 5 report. “But while the direction remains the same, the magnitude is reduced.”

See The Full Story: HERE

We have put some details together on the ETFs mentioned:

The investment (IJR) seeks investment results that correspond generally to the performance, before fees and expenses, of the S&P SmallCap 600 index. The Fund generally invests at least 90% of assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. It may invest the remainder of assets in securities not included in the underlying index but which BGFA believes will help the fund track the underlying index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents, including shares of money market funds advised by BGFA.

TOP 10 HOLDINGS ( 5.48% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Gardner Denver, Inc. Common Sto (GDI) 0.55
Mednax, Inc. Common Stock (MD) 0.7
Oil States International, Inc. (OIS) 0.49
Piedmont Natural Gas Company, I (PNY) 0.49
Prosperity Bancshares, Inc. (PRSP) 0.47
Rock-Tenn Company Common Stock (RKT) 0.49
Skyworks Solutions, Inc. (SWKS) 0.62
St. Mary Land & Exploration Com (SM) 0.53
Tractor Supply Company (TSCO) 0.48
Varian Semiconductor Equipment (VSEA) 0.66

Chart for iShares S&P SmallCap 600 Index (IJR)

The investment (SPY) seeks to correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Index. SPDR Trust is an exchange-traded fund that holds all of the S&P 500 Index stocks. It is comprised of undivided ownership interests called SPDRs. The fund issues and redeems SPDRs only in multiples of 50,000 SPDRs in exchange for S&P 500 Index stocks and cash.

TOP 10 HOLDINGS ( 19.26% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Apple Inc. (AAPL) 1.9
AT&T Inc. (T) 1.66
Chevron Corporation Common Stoc (CVX) 1.55
Exxon Mobil Corporation Common (XOM) 3.25
General Electric Company Common (GE) 1.61
International Business Machines (IBM) 1.72
JP Morgan Chase & Co. Common St (JPM) 1.65
Johnson & Johnson Common Stock (JNJ) 1.78
Microsoft Corporation (MSFT) 2.36
Procter & Gamble Company (The) (PG) 1.78

Chart for SPDRs (SPY)

The investment (MDY) seeks to provide investment results that generally correspond to the performance of the S&P MidCap 400 Index. The fund holds all of the S&P stocks in the MidCap 400 Index. It is a unit investment trust that consists of individual ownership interest units called SPDRs in the MidCap SPDR trust. The fund issues and redeems MidCap SPDRs only in multiples of 25,000 in exchange for S&P MidCap 400 Index stocks and cash.

TOP 10 HOLDINGS ( 6.48% OF TOTAL ASSETS)  
 
Company Symbol % Assets
CarMax Inc (KMX) 0.6
Cerner Corporation (CERN) 0.62
Cree, Inc. (CREE) 0.65
Everest Re Group, Ltd. Common S (RE) 0.57
Joy Global Inc. (JOYG) 0.58
Lam Research Corporation (LRCX) 0.55
New York Community Bancorp, Inc (NYB) 0.67
Newfield Exploration Company Co (NFX) 0.71
Pride International, Inc. Commo (PDE) 0.62
Vertex Pharmaceuticals Incorpor (VRTX) 0.91

Chart for SPDR S&P MidCap 400 ETF (MDY)


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