Two other fundamentally/quantitative weighted funds, PRFZ (PowerShares FTSE/RAFI U.S. 1500 Small-Mid), which most classify as a small cap/mid cap or “SMID” hybrid fund, fell well short of the market cap benchmark, and was down 6.92%. PXSV (PowerShares Fundamental Pure Small Value) was down 4.29% in 2011.
Noting the dispersion in the returns across the various products that we have highlighted in this space, it does seem clear that different weighting methodologies and approaches may perform better or worse depending on the specific market environment, and given the nature of small cap investing as we had mentioned earlier, it makes sense to consider multiple ETF strategies here for an overall approach. Market cap, in IJR, trumped other approaches last year notably in the small cap space, and it remains to be seen what 2012 will bring us in terms of a winning methodology.
iShares Russell 2000