With small-cap stocks and the related exchange traded rapidly reasserting themselves as leadership groups this year, some investors may be wondering if the small-cap rally is a case of too far too fast.
Apprehensive investors can wade into smaller companies in less volatile fashion via dividend strategies, such as the ProShares Russell 2000 Dividend Growers ETF (CBOE: SMDV).
SMDV, a dividend spin on the Russell 2000, the benchmark U.S. small-cap index, tracks the Russell 2000 Dividend Growth Index, which includes small-cap firms with dividend increase streaks of at least a decade. SMDV is up nearly 9% this year and resides less than 2% below its 52-week high.
“Small-cap stocks were among the biggest losers during the stock market’s rout late last year as investors worried about high leverage, but they have outperformed in 2019’s rebounding market, with shares of debt-laden companies leading the charge,” according to Reuters.