Though small-cap fund iShares Russell 2000 ETF (IWM - Free Report) has outperformed the S&P 500 year to date and in the last one-month frame (as of May 21, 2019), the smaller counterpart of the S&P, i.e. SPDR S&P 600 Small Cap ETF has underperformed the bigger index S&P 500 ETF (SPY - Free Report) . SLY is down 1.8% in the past month versus 1.3% losses in SPY.
The past month was busy with earnings and corporate results probably have a lot to do with this performance.
Q1 Outperformance: S&P 600 Vs. 500
The Q1 earnings season is almost at its end with 89.2% of the S&P 600 Index having reported so far. Earnings are down 18.3% year over year on 3.1% revenue growth, with 57.1% beating EPS estimates and 56.3% surpassing top-line expectations, per the Earnings Trends issued on May 15.
As many as 12 sectors out of the total 16 produced negative earnings growth, out of which nine witnessed a double-digit slump. Overall, results of the pint-sized stocks have been pretty downbeat compared with the S&P 500.
About 90.8% of the large-cap index has already reported with earnings growth of 0.5% on 5% higher revenues. The S&P 500 Index has so far produced a blended beat ratio of 51.1%.
Better-Performing Small-Cap Sector ETFs
Against this lackluster backdrop, below we highlight a few small-cap sector ETFs that have produced positive or (less negative) earnings or revenue growth.
Consumer Discretionary – Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report)
About 67.9% of the companies have reported results, recording Q1 earnings growth of 20.3% and revenue expansion of 7%. The blended beat ratio is 68.4%.
Finance– Invesco S&P SmallCap Financials ETF (PSCF - Free Report)
About 99.3%% of the companies have reported results, with growth of 4% earnings growth and 6.2% revenue growth. The blended beat ratio is 30.8% (see all financial ETFs here).
Transportation – SPDR S&P Transportation ETF (XTN - Free Report)
All companies of the S&P 600 Index have released numbers so far. Total earnings for the transportation sector are down only 4.3% on 0.9% lower revenues. Though blended beat ratio is 28.6%, earnings beat ratio of 78.6% is stronger. Notably, the fund XTN is heavy on smaller-cap transportation stocks (read: A Look at Transport ETFs After Q1 Earnings).
Construction – Invesco Dynamic Building & Construction ETF (PKB - Free Report)
Around 90.9% of the companies have reported earrings as of now. Earnings and revenues for the construction sector are down 7.6% and up 9.9%, respectively. Earnings beat ratio is 50% while revenue beat ratio is 80%.
The fund has about 45% exposure to mid-cap construction stocks, followed by 40% small-caps and 15% large caps (read: Solid US Labor Market Puts Focus on 3 Sector ETFs & Stocks).
Industrial Production – Invesco S&P SmallCap Industrials ETF (PSCI - Free Report)
A solid 93.2% of the companies have posted earrings. Earnings and revenues for the construction sector are down 7.5% and up 2.0%, respectively, while the respective beat ratios are 56.1% and 48.8%.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Though small-cap fund iShares Russell 2000 ETF (IWM - Free Report) has outperformed the S&P 500 year to date and in the last one-month frame (as of May 21, 2019), the smaller counterpart of the S&P, i.e. SPDR S&P 600 Small Cap ETF has underperformed the bigger index S&P 500 ETF (SPY - Free Report) . SLY is down 1.8% in the past month versus 1.3% losses in SPY.
The past month was busy with earnings and corporate results probably have a lot to do with this performance.
Q1 Outperformance: S&P 600 Vs. 500
The Q1 earnings season is almost at its end with 89.2% of the S&P 600 Index having reported so far. Earnings are down 18.3% year over year on 3.1% revenue growth, with 57.1% beating EPS estimates and 56.3% surpassing top-line expectations, per the Earnings Trends issued on May 15.
As many as 12 sectors out of the total 16 produced negative earnings growth, out of which nine witnessed a double-digit slump. Overall, results of the pint-sized stocks have been pretty downbeat compared with the S&P 500.
About 90.8% of the large-cap index has already reported with earnings growth of 0.5% on 5% higher revenues. The S&P 500 Index has so far produced a blended beat ratio of 51.1%.
Better-Performing Small-Cap Sector ETFs
Against this lackluster backdrop, below we highlight a few small-cap sector ETFs that have produced positive or (less negative) earnings or revenue growth.
Consumer Discretionary – Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report)
About 67.9% of the companies have reported results, recording Q1 earnings growth of 20.3% and revenue expansion of 7%. The blended beat ratio is 68.4%.
Finance– Invesco S&P SmallCap Financials ETF (PSCF - Free Report)
About 99.3%% of the companies have reported results, with growth of 4% earnings growth and 6.2% revenue growth. The blended beat ratio is 30.8% (see all financial ETFs here).
Transportation – SPDR S&P Transportation ETF (XTN - Free Report)
All companies of the S&P 600 Index have released numbers so far. Total earnings for the transportation sector are down only 4.3% on 0.9% lower revenues. Though blended beat ratio is 28.6%, earnings beat ratio of 78.6% is stronger. Notably, the fund XTN is heavy on smaller-cap transportation stocks (read: A Look at Transport ETFs After Q1 Earnings).
Construction – Invesco Dynamic Building & Construction ETF (PKB - Free Report)
Around 90.9% of the companies have reported earrings as of now. Earnings and revenues for the construction sector are down 7.6% and up 9.9%, respectively. Earnings beat ratio is 50% while revenue beat ratio is 80%.
The fund has about 45% exposure to mid-cap construction stocks, followed by 40% small-caps and 15% large caps (read: Solid US Labor Market Puts Focus on 3 Sector ETFs & Stocks).
Industrial Production – Invesco S&P SmallCap Industrials ETF (PSCI - Free Report)
A solid 93.2% of the companies have posted earrings. Earnings and revenues for the construction sector are down 7.5% and up 2.0%, respectively, while the respective beat ratios are 56.1% and 48.8%.
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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