For investors seeking momentum, Guggenheim S&P SmallCap 600 Pure Growth ETF (RZG - Free Report) is probably on radar now. The fund just hit a 52-week high, which is up roughly 36.2% from its 52-week low price of $67.44/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:
RZG in Focus
The fund contains only those S&P SmallCap 600 companies with strong growth characteristics as selected by Standard & Poor’s. RZG charges investors 35 basis points a year in fees. It exchanges less than 10,000 shares a day. The fund holds 144 securities and has top holdings in Supernus Pharmaceuticals, Ligand Pharmaceuticals, Inc. and Fabrinet (see all small-cap ETFs here).
Why the Move?
The U.S. stock market has shown some strength in past week with U.S. president-elect Donald Trump planning expansive government spending, lesser financial regulation and increased tax cuts to boost economic growth. While the S&P 500 is on a tear now, small caps are leading the rally. The regained momentum in the U.S. economy spread a strong air of optimism in the small cap space.
More Gains Ahead?
Currently, RZG 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 14.10. A positive weighted alpha hints at more gains.
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