Moreover, merger and acquisition activity can continue to pick up ahead, with larger companies seeking to expand by purchasing smaller businesses to complement or expand their markets. Larger firms may be more apt to engage in M&A activity now, especially with interest rates and financing costs near historical lows.
Other strong small-cap performers include the PowerShares Russell 2000 Equal Weight Portfolio (NYSEArca: EQWS) and the Schwab U.S. Small-Cap ETF (NYSEArca: SCHA).
EQWS takes an equal-weight position on the Russell 2000. Compared to the benchmark Russell 2000, the equal-weight methodology has a much lower financial tilt at 10.9% and smaller information technology position at 13.3%. The indexing methodology also makes the fund overweight micro-caps at 62.7% of the portfolio.
Related: ETFs In 2016: Large Cap vs. Small Cap
IJR’s “look pretty favorable for the S&P 600, Wald added. Looking at a chart of the S&P SmallCap 600 index compared to the advance-decline line, Wald points out that more stocks within the index are rising than falling,” reports CNBC.
iShares Core S&P Small-Cap ETF
