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Here's Why Small-Cap ETFs Are Looking Great Buys Now
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Wall Street cheered the welcoming news of declining new coronavirus cases as economic reopening trades kept the optimism levels high. Accordingly, the Dow Jones Industrial Average increased 0.6% on May 24. The S&P 500 rose 1% on the back of strength in the tech and communication services sectors. Moreover, the Nasdaq Composite was also up 1.4% on the same trading day. Major technology players like Alphabet (GOOGL - Free Report) , Facebook and Microsoft (MSFT - Free Report) increased more than 2% on May 24.
Notably, shares of American Airlines (AAL - Free Report) and United Airlines rose at least 1%. Carnival (CCL) was also up around 2.7%. Norwegian Cruise Line (NCLH) increased 4.7% post the announcement of plans to restart cruising in the United States this summer, per a CNBC article.
Markedly, the small-cap centric index, namely the Russell 2000, rose 0.5%. This upside is being largely led by small-cap companies that are closely tied to the U.S. economy and are therefore well-positioned to outshine when the economy improves.
Going by data compiled by Johns Hopkins University, the seven-day average of new infections was about 26,000 as of May 23, per a CNBC article. Encouragingly, the number of cases has dropped to the lowest level since June 2020. Accelerated coronavirus vaccine rollout has been the major factor that has helped gain control over the aggravating outbreak.
President Joe Biden recently announced his latest vaccination goals. He aims at administering at least one dose of a coronavirus vaccine to 70% of U.S. adults along with getting 160 million adults completely vaccinated by Jul 4, per a CNBC article.
Notably, around 39% of the Americans are completely vaccinated as of May 22, per data from the Centers for Disease Control and Prevention (CDC) (as mentioned in a CNBC article). The same article also mentions that around 49% of the U.S. population has received at least one dose of the coronavirus vaccine. Going on, 61% of the Americans are at least partially vaccinated among the age group of 18 years and older, per the CDC data.
Going on, the latest public health guidelines issued by the CDC have relaxed restrictions on wearing masks at indoor and public gatherings. According to the new recommendations, completely vaccinated people do not need to wear masks or stay six feet away from others at indoor or outdoor gatherings, per a CNBC article.
Small-Cap ETFs to Consider
For investors looking to capitalize on this opportunity, the following small-cap ETFs could be strong pure plays:
This fund follows the CRSP US Small Cap Growth Index. The product managed assets worth $14.92 billion, and charges 7 basis points (bps) in annual fees and expenses. The fund currently sports a Zacks ETF Rank #3 (Hold), with a Medium-risk outlook (read: Add These Small-Cap ETFs to Your Portfolio in Q2).
This fund tracks the Russell 2000 Growth Index and offers exposure to small-cap companies that have earnings growth expectations above average rate relative to the market. The product managed assets worth $11.32 billion and charges 24 bps in annual fees and expenses. The fund presently flaunts a Zacks ETF Rank of 3, with a High-risk outlook (read: ETFs at Risks If Tax Law Changes in U.S.).
This product tracks the S&P SmallCap 600 Growth Index. It managed assets worth $6.17 billion and charges 18 bps in annual fees and expenses. The fund carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook.
This ETF follows The S&P SmallCap 600 Growth Index, which comprises stocks that exhibit the strongest growth characteristics based on sales growth, earnings change to price and momentum. The product managed assets worth $2.18 billion and charges 15 bps in annual fees and expenses. The fund carries a Zacks ETF Rank #2, with a Medium-risk outlook.
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Here's Why Small-Cap ETFs Are Looking Great Buys Now
Wall Street cheered the welcoming news of declining new coronavirus cases as economic reopening trades kept the optimism levels high. Accordingly, the Dow Jones Industrial Average increased 0.6% on May 24. The S&P 500 rose 1% on the back of strength in the tech and communication services sectors. Moreover, the Nasdaq Composite was also up 1.4% on the same trading day. Major technology players like Alphabet (GOOGL - Free Report) , Facebook and Microsoft (MSFT - Free Report) increased more than 2% on May 24.
Notably, shares of American Airlines (AAL - Free Report) and United Airlines rose at least 1%. Carnival (CCL) was also up around 2.7%. Norwegian Cruise Line (NCLH) increased 4.7% post the announcement of plans to restart cruising in the United States this summer, per a CNBC article.
Markedly, the small-cap centric index, namely the Russell 2000, rose 0.5%. This upside is being largely led by small-cap companies that are closely tied to the U.S. economy and are therefore well-positioned to outshine when the economy improves.
Going by data compiled by Johns Hopkins University, the seven-day average of new infections was about 26,000 as of May 23, per a CNBC article. Encouragingly, the number of cases has dropped to the lowest level since June 2020. Accelerated coronavirus vaccine rollout has been the major factor that has helped gain control over the aggravating outbreak.
President Joe Biden recently announced his latest vaccination goals. He aims at administering at least one dose of a coronavirus vaccine to 70% of U.S. adults along with getting 160 million adults completely vaccinated by Jul 4, per a CNBC article.
Notably, around 39% of the Americans are completely vaccinated as of May 22, per data from the Centers for Disease Control and Prevention (CDC) (as mentioned in a CNBC article). The same article also mentions that around 49% of the U.S. population has received at least one dose of the coronavirus vaccine. Going on, 61% of the Americans are at least partially vaccinated among the age group of 18 years and older, per the CDC data.
Going on, the latest public health guidelines issued by the CDC have relaxed restrictions on wearing masks at indoor and public gatherings. According to the new recommendations, completely vaccinated people do not need to wear masks or stay six feet away from others at indoor or outdoor gatherings, per a CNBC article.
Small-Cap ETFs to Consider
For investors looking to capitalize on this opportunity, the following small-cap ETFs could be strong pure plays:
Vanguard Small-Cap Growth ETF (VBK - Free Report)
This fund follows the CRSP US Small Cap Growth Index. The product managed assets worth $14.92 billion, and charges 7 basis points (bps) in annual fees and expenses. The fund currently sports a Zacks ETF Rank #3 (Hold), with a Medium-risk outlook (read: Add These Small-Cap ETFs to Your Portfolio in Q2).
iShares Russell 2000 Growth ETF (IWO - Free Report)
This fund tracks the Russell 2000 Growth Index and offers exposure to small-cap companies that have earnings growth expectations above average rate relative to the market. The product managed assets worth $11.32 billion and charges 24 bps in annual fees and expenses. The fund presently flaunts a Zacks ETF Rank of 3, with a High-risk outlook (read: ETFs at Risks If Tax Law Changes in U.S.).
iShares S&P Small-Cap 600 Growth ETF (IJT - Free Report)
This product tracks the S&P SmallCap 600 Growth Index. It managed assets worth $6.17 billion and charges 18 bps in annual fees and expenses. The fund carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook.
SPDR S&P 600 SmallCap Growth ETF (SLYG - Free Report)
This ETF follows The S&P SmallCap 600 Growth Index, which comprises stocks that exhibit the strongest growth characteristics based on sales growth, earnings change to price and momentum. The product managed assets worth $2.18 billion and charges 15 bps in annual fees and expenses. The fund carries a Zacks ETF Rank #2, with a Medium-risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>