Cyclical Rotation The Small-Cap Way

PowerShares S&P SmallCap Consumer Discretionary Portfolio (NasdaqGS: PSCD)

The PowerShares S&P SmallCap Consumer Discretionary Portfolio joins PSCT as another small-cap ETF for investors looking to exploit the cyclical rotation. And like its technology-focused counterpart, PSCD outperformed a major large-cap equivalent and IWM over the past month. While the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) lost ground over that time, PSCD gained 2.6%. In fact, PSCD has been the better over the past 90 days and year-to-date as the ETF is up almost 18%.

And as is the case with PSCT, PSCD offers a lineup that is not chock full of obscure, risky micro-caps. PSCD’s 106-stock lineup is actually littered with companies consumers are intimately familiar with including Buffalo Wild Wings (NasdaqGM: BWLD), Coinstar (NasdaqGM: CSTR) and Crocs (NasdaqGM: CROX).

The risk to PSCD is obvious: Any noticeable retrenchment in the quality of consumer-related economic data could make this ETF vulnerable to selling pressure. A drop below support at $38 could do the same.

PowerShares S&P SmallCap Information Technology Portfolio

ETF Trends editorial team contributed to this article.