“Banks stand out as one sector that particularly benefits from the tax cuts, as most of them, including many of the largest banks, are primarily U.S.-focused. The change in the tax rate alone has lifted net income for many banks by around 20%,” notes ClearBridge.
Related: ETF Investors Should Look to Small-Cap, Growth as Rates Rise
SMDV also delivers less volatility than traditional small-cap benchmarks. Over the past three years, the ETF’s average annualized volatility has been significantly less than that of the Russell 2000 Index and the S&P SmallCap 600 Index. During that period, SMDV outperformed the Russell 2000.
SMDV’s trailing 12-month dividend yield is more than 70 basis points above that of the Russell 2000. Investors added $15.79 million to SMDV in the third quarter.
For more trends in fixed income, visit the Rising Rates Channel.