Small capitalization companies may be lagging other asset categories this year, but small-cap oil stock exchange traded funds are burning up.
The PowerShares S&P SmallCap Energy Portfolio (NasdaqGS: PSCE) increased 13.5% and IQ Global Oil Small Cap ETF (NYSEArca: IOIL) rose 8.9% year-to-date.
In comparison, the Energy Select Sector SPDR (NYSEArca: XLE), which holds over 80% in large- and mega-cap energy stocks, is up 6.5% so far this year.
The small-cap energy ETFs are also outperforming the S&P 500 Index, which is 2.3% higher year-to-date, and the broader small-cap Russell 2000 Index, which has dipped 1.3% this year.
The shale oil boom and shift to value investing has helped bolster small-cap energy ETF plays. [Energy ETFs Energized by Inflows, Low Valuations]
RBC Capital Markets sees bullish prospects for oil rig companies, especially those active in the Permian Basin in west Texas, which comprise about 28% of the country’s drilling machines, CNBC reports. [North America Nirvana for Oil Services ETFs]