Small-Cap Sector ETFs to buy in May

PSCH is one of this year’s top-performing non-leveraged healthcare ETFs. Up 16.1%, PSCH has outperformed its large-cap equivalent, the Health Care Select Sector SPDR (NYSEArca: XLV), by a margin of more than two-to-one.

What it lacks in pharmaceuticals and biotech exposure, PSCH makes up for with heavy weights to healthcare equipment manufacturers and services providers. Those sub-sectors combine for roughly two-thirds PSCH’s weight. That is nearly double the weight to large-cap equipment makers and services providers featured by XLV. [Small-Cap Sector ETF Star]

“While both of these PowerShares ETFs trade less frequently and with wider bid/ask spreads than most sector products including those from SSGA, we believe they can play a meaningful role to support sector rotation strategies,” said S&P Capital IQ.

The research firm has an overweight rating on PSCC and a marketweight rating on PSCH.

PowerShares S&P SmallCap Consumer Staples Portfolio