Investors may consider small-cap Europe exchange traded fund for their cheaper valuations and potential growth opportunity in a seasonally strong period.
Lamar Villere, co-manager of the Villere Balanced Fund, argues that small-caps are where investors should be now, reports Reem Nasr for CNBC.
We are heading toward a seasonally strong period for the small-cap asset category as smaller stocks typically outperform larger and more sluggish peers. [ETFs History Says A Strong October Bodes Well For]
“For one thing we think that’s where you can actually find some growth and find some companies that aren’t as well followed, so you can get in at attractive valuations,” Villere told CNBC, contending that small-caps are more able to defend against outside pressures, such as slowing global growth.
ETF investors can also track the broad group through options like the iShares Core S&P Small-Cap ETF (NYSEArca: IJR), which tracks the S&P SmallCap 600; Vanguard Small Cap ETF (NYSEArca: VB), which follows the CRSP US Small Cap Index,; the iShares Russell 2000 ETF (NYSEArca: IWM), which tracks the Russell 2000 Index; and Schwab U.S. Small-Cap ETF (NYSEArca: SCHA), which tracks the Dow Jones U.S. Small-Cap Total Stock Market Index.
Additionally, since small-caps have fallen behind this year, Villere believes smaller stocks offer more attractive valuations relative to large-caps.