Micro-cap fund managers have been closing their doors after the big run-up in 2003-2005. The logical alternative for investors looking to grab hold of a diversified group of stocks in this space (market capitalizations below $250 million) is Micro-cap ETFs. Unlike actively managed micro-cap funds, these new ETFs offer greater diversification and the opportunity to see what you actually have in your portfolio. (Because of the competitiveness and liquidity in the micro-cap marketplace, most fund mangers are tight-lipped.)
The iShares Russell Micro-cap Index (IWC), the PowerShares Zacks Micro Cap Portfolio (PZI) and The First Trust Dow Jones Select MicroCap Index (FDM) are the ETFs representing this field. The International Herald Tribune did a nice job covering this asset class in a recent piece.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.