July 01, 2007 at 1:00 pm by Tom Lydon
Each index provider has a different definition for small cap and micro cap stocks within exchange traded funds (ETFs). For example, the S&P defines small cap as companies with a market cap of $300 million to $1.5 billion, but the Dow Jones looks at the largest 5,000 stocks and numbers 751 through 2,500 are put in the Wilshire Small-Cap Index and numbers 2,501 through 5,000 are placed in the Wilshire Micro-Cap Index.
With small cap and micro cap ETFs defined, Seeking Alpha offers investing suggestions on how to use them:
- Ways to diversify your portfolio
- When to use micro cap ETFs
- Tips on shorting micro cap ETFs
- Which ETFs are best for hedging
- When to exercise caution
Tags: Micro-Cap
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