For investors seeking momentum, PowerShares Russell 2000 Equal Weight Portfolio (EQWS - Free Report) is probably on radar now. The fund just hit a 52-week high, which is up roughly 44.6% from its 52-week low price of $26.13/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:
EQWS in Focus
The fund tracks the Russell 2000 Equal Weight Index which provides equal-weighted exposure to approximately 2,000 smaller-cap securities. EQWS charges investors 25 basis points a year in fees. It exchanges less than 1,000 shares a day. The fund holds 1,920 securities with none holding more than 0.32% of the assets. From a sector look, the fund is well diversified with industrials, information technology, consumer discretionary, energy and consumer staples making up for the top five sectors (see: all small-cap ETFs here).
Why the Move?
The U.S. stock market has gained strength with U.S. president-elect Donald Trump planning expansive government spending, lesser financial regulation and increased tax cuts to boost economic growth. Trump’s massive stimulus policies should benefit small caps more as these are closely tied to the U.S. economy and generate most of their revenues from the domestic market. Also, the regained momentum in the U.S. economy spread a strong air of optimism in the small-cap space.
More Gains Ahead?
Currently, EQWS has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook, so it is hard to get a handle on its future returns one way or the other. However, the fund has a positive weighted alpha of 20.50. A positive weighted alpha hints at more gains.
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