Sam Stovall, chief investment officer at Standard & Poor’s, believes small-cap companies will lead the economic recovery because they will spur new growth through job creation and mergers and acquisitions. U.S. small-cap ETFs have been performing exactly as expected, with double-digit gains last year and year-to-date returns of between 15% and 20%.
- iShares Russell 2000 Index Fund (NYSEArca: IWM)
- iShares S&P SmallCap 600 (NYSEArca: IJR)
- Vanguard Small-Cap ETF (NYSEArca: VB)
Adam Patti, president of IndexIQ, adds that Asian small-cap stocks are particularly attractive because the region wasn’t hit as hard by the crisis. Additionally, countries in that part of the world feed Chinese demand and could see “growth rates above historical norms.” IndexIQ is in the process of launching 13 country-specific small-cap ETFs targeting Asian economies and some commodities ETFs. So far, IndexIQ has rolled out three of its 13 planned small-cap funds. [IndexIQ Launches Two New Small-Cap ETFs.]
- IQ Australia Small Cap ETF (NYSEArca: KROO)
- IQ Canada Small Cap ETF (NYSEArca: CNDA)
- IQ South Korea Small Cap ETF (NYSEArca: SKOR)
PowerShares launched nine U.S. small-cap sector ETFs this month that focuses on energy, utilities, materials, consumer discretionary, consumer staples, industrials, health care, information technology and financials. [PowerShares Launches 9 New Small-Cap Sector ETFs.]
Van Eck currently has two small-cap emerging market ETFs under its wing: Market Vectors Latin America Small Cap Index ETF (NYSEArca: LATM) and Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF). [Market Vectors Brings Small-Cap Latin America ETF to Market.]
For more information on small-caps, visit our small-cap category.
Max Chen contributed to this article.