Investors aiming to reap substantial profits in the short run should turn to small cap ETF’s. Though comparatively riskier than other fund categories, these funds have the ability to deliver appreciably higher returns due to two principal reasons. Firstly, they generate high sales volumes in a rising market, leading to a spike in their prices. In addition, research has shown that smaller firms reinvest their profits back into their business. This often reassures shareholders of better performance over the long term. Moreover ETF’s offer a more diversified and less expensive way to play the small cap investment marketplace.
Below we will share with you 5 best performing Small Cap ETF’s Year to Date.
||Total Return Year To Date
|Schwab U.S. Small Cap ETF
|Vanguard Small Cap ETF
|Ishares Morningstar Small Core Index
|Ishares Russell 2000 Index
|SPDR S&P 600 Small Cap ETF
Schwab U.S. Small Cap ETF (SCHA - ETF report) seeks long-term capital growth. The ETF invests a large share of its assets in domestic small cap companies. The investment seeks to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Small-Cap Total Stock Market Index SM. This Schwab ETF is currently trading at a -0.34% discount to its NAV. This small-cap ETF has a one year return of 21.07%.
The small-cap mutual fund has a minimum initial investment of $1,500 and an expense ratio of 1.75% compared to a category average of 1.52%.
Vanguard Small Cap ETF (VB - ETF report) invests the majority of its assets in small-cap companies. The investment seeks to replicate, net of expenses, the MSCI US Small Cap 1750 Index. This ETF has one of the lowest expense ratios in its category of 0.12% vs the ETF category average of 0.37% and the mutual fund average of 1.37%. This small-cap ETF returned 31.45% over the last one year period.
iShares Morningstar Small Core Index (JKJ - ETF report) seeks capital appreciation over the long term. A large proportion of the fund’s assets are utilized to purchase stocks of small-cap companies whose market capitalizations lie within the range of most small cap indices. This investment seeks to replicate, net of expenses, the Morningstar Small Core index. This small-cap ETF has a five year annualized return of 5.12%.
ishares Russell 2000 Index (IWM - ETF report) invests the majority of its assets in equity securities of small-cap companies. The investment seeks to replicate, net of expenses, the Russell 2000 index. This Small Cap ETF invests in approximately 2000 of the smallest capitalization-weighted companies in the Russell 3000 index. This small-cap ETF has a below average turnover of 20% vs. the category average of 44%, meaning its more tax efficient.
Moreover this small cap ETF has returned an annualized 4.66% over the last five years.
SPDR S&P 600 Small Cap ETF (SLY - ETF report). The investment seeks to replicate, net of expenses, the S&P SmallCap 600 index. This Small cap ETF has an extremely low turnover ratio of 20% half the small cap ETF category average, and 1/5 of the mutual fund category average (making it extremely tax efficient). This small-cap ETF is Sponsored by Standard and Poors.
The small-cap ETF has a five year annualized return of 6.02%.
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