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Best Small-Cap Sector ETFs Amid Otherwise Dull Q1 Earnings
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Small-cap stocks have been staging a dull performance in recent times. SPDR S&P 600 Small Cap ETF has gained 2.5% this year (as of Jun 2, 2023) versus 9.9% gains in the S&P 500. But things are taking a turn for the better for the pint-sized stocks as these have less domestic exposure and outperforms in a rising greenback environment. The latest signing of the U.S. debt deal should bode well for the pint-sized stocks.
Investors may also be interested in knowing how the earnings picture is evolving for the small-cap segment. That would give investors a clear idea in assessing the future performance of an otherwise still-struggling small-cap segment.
Q1 Performance: S&P 600 Versus 500
Per Zacks Earnings Trends issued on May 31, 2023, the S&P 500 earnings are projected to decline 3.7% in Q1 on 4.4% higher revenues. Looking at Q1 as a whole for the small-cap index, total earnings are expected to be down 10.2% from the same period last year on 0.6% higher revenues.
Against this backdrop, below we highlight a few small-cap sector ETFs that have reported a better earnings and revenue growth rate in the about-to-end first-quarter reporting season.
Sector ETFs in Focus
Construction — Invesco Dynamic Building & Construction ETF (PKB - Free Report)
Earnings are likely to be down 32.4% year over year on 8% lower revenues. The sector has a blended beat ratio of 72.2%.
The consumer staples sector generally acts as a safe haven amid political and economic turmoil. Stocks in these sectors generally outperform during periods of low economic growth and high uncertainty. Earnings are likely to be down 0.9% year over year on 0.6% higher revenues. The sector has seen a blended beat ratio of 57.1%.
Upbeat activities in infrastructure and industrials sectors made demand for materials high. Earnings are likely to be up 33% year over year on 4.8% higher revenues. The sector has seen a blended beat ratio of 48.3%.
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Best Small-Cap Sector ETFs Amid Otherwise Dull Q1 Earnings
Small-cap stocks have been staging a dull performance in recent times. SPDR S&P 600 Small Cap ETF has gained 2.5% this year (as of Jun 2, 2023) versus 9.9% gains in the S&P 500. But things are taking a turn for the better for the pint-sized stocks as these have less domestic exposure and outperforms in a rising greenback environment. The latest signing of the U.S. debt deal should bode well for the pint-sized stocks.
Investors may also be interested in knowing how the earnings picture is evolving for the small-cap segment. That would give investors a clear idea in assessing the future performance of an otherwise still-struggling small-cap segment.
Q1 Performance: S&P 600 Versus 500
Per Zacks Earnings Trends issued on May 31, 2023, the S&P 500 earnings are projected to decline 3.7% in Q1 on 4.4% higher revenues. Looking at Q1 as a whole for the small-cap index, total earnings are expected to be down 10.2% from the same period last year on 0.6% higher revenues.
Against this backdrop, below we highlight a few small-cap sector ETFs that have reported a better earnings and revenue growth rate in the about-to-end first-quarter reporting season.
Sector ETFs in Focus
Construction — Invesco Dynamic Building & Construction ETF (PKB - Free Report)
Earnings are likely to be down 32.4% year over year on 8% lower revenues. The sector has a blended beat ratio of 72.2%.
Industrial Products – Invesco S&P SmallCap Industrials ETF (PSCI - Free Report)
Earnings are likely to be up 2.3% year over year on 1.4% lower revenues. The sector has a blended beat ratio of 69.2%.
Consumer Staples – Invesco S&P SmallCap Consumer Staples ETF (PSCC - Free Report)
The consumer staples sector generally acts as a safe haven amid political and economic turmoil. Stocks in these sectors generally outperform during periods of low economic growth and high uncertainty. Earnings are likely to be down 0.9% year over year on 0.6% higher revenues. The sector has seen a blended beat ratio of 57.1%.
Basic Materials — Invesco S&P SmallCap Materials ETF (PSCM - Free Report)
Upbeat activities in infrastructure and industrials sectors made demand for materials high. Earnings are likely to be up 33% year over year on 4.8% higher revenues. The sector has seen a blended beat ratio of 48.3%.
Technology — Invesco S&P SmallCap Information Technology ETF (PSCT - Free Report)
Earnings are likely to be down 7.6% year over year on 1.9% higher revenues. The sector has seen a blended beat ratio of 47.1%.