Here’s a first for the exchange traded fund (ETF) industry: a line of small-cap funds that target specific sectors. It’s what PowerShares has in mind, and the ETFs would be just in time for an anticipated small-cap rally in the recession’s wake.Invesco PowerShares has filed to offer 10 new exchange-traded funds that focus on small-cap sectors, a first for the ETF industry, reports Luisa Beltran for Ignites. The provider filed with the Securities and Exchange Commission (SEC) for offerings in the following sectors:
- Consumer discretionary
- Consumer staples
- Energy
- Financials
- Health care
- Industrials
- Information technology
- Materials
- Telecommunications
- Utilities
The funds will be made up of subsets of the S&P SmallCap 600 Index. The index includes companies with a market capitalization range of between $250 million and $1.2 billion. [Why small-cap companies have appeal now.]
There are no other small sector ETF suites like this out there, which makes them innovative, and investors could find them especially appealing in this post-recession era. Small-cap stocks have outperformed large-caps over the past 10 years, and they’re also better positioned to take advantage of improving economies. [Micro-caps are another option for ETF investors.]
For more stories about asset class ETFs, visit our asset class ETF category.
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.