“But Boris Schlossberg, managing director of FX strategy at BK Asset Management, warns that there may be trouble coming for small caps. Some have suggested that protectionist policies such as those suggested by President Donald Trump would lead small caps to outperform their larger brethren. But Schlossberg doubts the U.S.-centric small caps would be safe from any coming trade storm,” according to CNBC.
A smart beta alternative to IJR and IWM is the Guggenheim S&P Smallcap 600 Pure Value ETF (NYSEArca: RZV), which has a heavily cyclical lineup. RZV targets companies that exhibit the value characteristic but focuses on the smaller companies taken from the S&P SmallCap 600 benchmark. Industrial, consumer discretionary and materials stocks combine for 57% of that ETF’s weight.
Tom Lydon’s clients owns shares of IWM.