With the federal government coming to the rescue by offering small businesses relief loans as part of its $2 trillion stimulus package amid the coronavirus outbreak, there are still some companies that have been left out in the cold. JPMorgan Chase disbursed $14 billion in loans, but there are still $26 billion relief applications that are in limbo.
“Chase has secured more funding for small businesses than anyone else in the industry,” spokeswoman Trish Wexler said in a statement. “We’re fully prepared to help many, many more once additional funding is approved. We’re proud to support businesses that collectively employ more than a million hard-working Americans.”
Per a CNBC report, the Paycheck Protection Program (PPP) is “a key component of the $2 trillion stimulus bill signed into law last month, (but) has quickly been drained of its $350 billion allotments despite a rocky start. Major lenders like JPMorgan, Wells Fargo and Citigroup have told applicants that the first-come, first-served effort is currently out of funding. Now Congress needs to come to an agreement to approve more money for the popular program.”
Small Cap ETFs to Consider
As small businesses look to add more debt at lower rates, it could help certain small cap companies in the interim as they get back on their feet following the coronavirus outbreak. For investors looking for concentrated exposure in small caps, here are a few Vanguard funds to look at:
- Vanguard Small-Cap Index Fund ETF Shares (NYSEArca: VB): seeks to track the performance of a benchmark index that measures the investment return of small-capitalization stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Small Cap Index, a broadly diversified index of stocks of small U.S. companies.
- Vanguard Small-Cap Value Index Fund ETF Shares (NYSEArca: VBR): seeks to track the performance of a benchmark index that measures the investment return of small-capitalization value stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Small Cap Value Index, a broadly diversified index of value stocks of small U.S. companies.
- Vanguard Small-Cap Growth Index Fund ETF Shares (VBK): seeks to track the performance of a benchmark index that measures the investment return of small-capitalization growth stocks. The fund employs an indexing investment approach designed to track the performance of the CRSP US Small Cap Growth Index, a broadly diversified index of growth stocks of small U.S. companies.
A Factor-Based Small Cap Option
For investors looking to use factor-based strategies to enhance their small cap exposure, there’s the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC). The fund seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® U.S. Small Cap Equity Index. The index is designed to deliver exposure to equity securities of small capitalization U.S. issuers.
Additionally, the index is constructed using the patented ActiveBeta® Portfolio Construction Methodology, which was developed to provide exposure to the “factors” that are commonly tied to a stock’s outperformance relative to market returns. These factors include value, momentum, quality and low volatility.
For more market trends, visit ETF Trends.
