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Small-Caps Beat Bigger Peers Last Week: 5 Top ETFs

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Last week was upbeat for Wall Street as vaccine hopes strengthened and consumers indulged in holiday shopping.  The Dow Jones reached 30,000 for the first time in history on Nov 24 while the S&P 500, the Nasdaq and the Russell 2000 also rallied (read: Dow Hits 30K for First Time: 7 Stocks Driving the ETF Rally).

Overall, the S&P 500 (up 1.58%), the Dow Jones (up 1.45%), the Nasdaq Composite (up 2.53%) and the Russell 2000 (up 3.99%) – all put up a great show last week, with the Russell 2000 – the small-cap index – clocking the best performance.

While Pfizer and Moderna already charged-up markets up with their success in COVID-19 vaccine clinical trials, AstraZeneca (AZN) said on Nov 23 that its vaccine, developed in collaboration with the University of Oxford, showed an average 70% effectiveness. Plus, Sanofi (SNY), GlaxoSmithKline's (GSK) and Johnson & Johnson (JNJ) are also working hard in the COVID-19 vaccine field.

NRF also noted last week that the retail sector has witnessed a V-shaped recovery as aggregate retail sales have grown both sequentially and year over year each month since June. For the first 10 months of this year, retail sales were up 6.4% versus the first 10 months of 2019, per NRF. Overall, the retail sector is expected to log a “strong finish” to 2020 despite COVID-19.

If this was not enough, stimulus hopes returned. Notably, on Nov 19, Treasury Secretary Steven Mnuchin “asked the Federal Reserve to shut down five emergency COVID-19 relief facilities and return $455 billion of unused funds, a move opposed by Fed Chairman Jerome Powell.”

In March, the Congress had approved a $2.2 trillion of emergency relief under the CARES Act, which included $500 billion to enact a variety of emergency lending facilities through the Fed and guarantee loans. Out of this, only a trivial portion of the funds — $25 billion — were used. Now Mnuchin wants to discuss a stimulus package with Democrats. Probably the unused funds will help them come up with a stimulus package which is a winning factor for the small caps.

Against this backdrop, below we highlight a few small-cap ETFs that were the top-performers last week.

Amplify Seymour Cannabis ETF (CNBS - Free Report) – Up 16.5%

The Amplify Seymour Cannabis ETF seeks to provide investors capital appreciation. The fund charges 75 bps in fees.

Invesco S&P MidCap 400 Pure Value ETF (RFV - Free Report) – Up 5.3%

The underlying S&P MidCap 400 Pure Value Index measures the performance of securities that exhibit strong value characteristics in the S&P MidCap 400 Index. The fund charges 35 bps in fees.

Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) – Up 5.1%

The underlying S&P 600 High Momentum Value Index is composed of securities with strong value characteristics selected from the Russell 2000 Index. The fund charges 39 bps in fees.

iShares Morningstar Small-Cap Value ETF (JKL - Free Report) – Up 5.0%

The underlying Morningstar Small Value Index measures the performance of stocks issued by small-capitalization companies. The fund charges 30 bps in fees.

Avantis U.S. Small Cap Value ETF (AVUV - Free Report) – Up 4.7%

The Avantis U.S. Small Cap Value ETF seeks long-term capital appreciation by investing primarily in a diverse group of U.S. small cap companies across market sectors and industry groups. It is an actively-managed product and does not track a benchmark. The fund charges 25 bps in fees.

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