For investors looking for momentum, SPDR S&P 600 Small Cap ETF is probably a suitable pick. The fund just hit a 52-week high and is up 136.3% from its 52-week low price of $40.78/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:

SLY in Focus

The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Small Cap 600 Index. SLY has AUM of $1.80 billion and charges 15 basis points in annual fees.

Why the Move?

Small-cap stocks, as indicated by the Russell 2000 Index, have been outperforming the broader market and hitting new all-time highs. The upside is being largely led by small-cap companies that are closely tied to the U.S. economy and thus are well-positioned to outperform when the economy improves. These stocks generally outperform on improvement in the U.S. economy. It is believed that wider coronavirus vaccine rollouts and another round of fiscal stimulus are making a strong case in favor of faster U.S. economic recovery in 2021. In the current scenario, funds like SLY appear an attractive investment option.

More Gains Ahead?

It seems like the fund will remain strong as it has a positive weighted alpha of 95.47, which gives cues of further rally.

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