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ETF News And Commentary

Sanghamitra Saha

Small-Cap Value ETF (RZV) Hits New 52-Week High


Trades from $3

For investors seeking momentum, Guggenheim S&P SmallCap 600 Pure Value ETF (RZV - ETF report) is probably on radar now. The fund just hit a 52-week high, which is up roughly 46.3% from its 52-week low price of $43.61/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

RZV in Focus    

The fund contains only those S&P SmallCap 600 companies with strong value characteristics as selected by Standard & Poor’s. RZV charges investors 35 basis points a year in fees and has top holdings in Century Aluminum, EZCORP and SPX Corp (see all small-cap ETFs here).

Why the Move?

With the U.S. economy taking root but volatility still flexing muscles on Fed rate hike worries, ECB taper talk and the U.S. presidential election, a jump in this U.S. small-cap value ETF is self-explanatory.

Small cap companies keep investors more domestically focused. If the Fed acts soon, the greenback will gain considerable strength. As small-cap stocks are less exposed to foreign markets, these are less scathed by a stronger greenback.

So, while a focus on small-caps is warranted to cash in on the growing domestic economy, concentrating on stocks with value characteristics would be better to make money in this volatile environment.

More Gains Ahead?

Currently, RZV has a Zacks ETF Rank #3 (Hold) with a High risk outlook. So it is hard to get a handle on its future returns one way or another. However, the fund has a positive weighted alpha of 13.70. A positive weighted alpha hints at more gains.

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