“Maley will be watching for decisions made in the Senate this week. A handful of Republican senators have yet to voice their support; Sen. Rand Paul, R-Ky., says he plans to vote for the bill despite reservations. If the bill does not pass, that would be a surprise to the market, Maley said, and should cause volatility across the small-caps,” according to CNBC.
Small-cap ETFs are usually cyclical at the sector level. For example, IWM allocates over 38% of its combined weight to financial services and technology stocks while industrials represent another 15%.
Another unique small-cap ETF is the Oppenheimer Small Cap Revenue ETF (NYSEArca: RWJ).
RWJ follows a revenue weighting methodology, which could provide diversified exposure to the market, is not influenced by stock price, reflects a truer indication of a company’s value and offers stable sector exposure. Moreover, revenue weighting may provide a more value-oriented portfolio and historically outperformed in a value-driven market while showing lower drawdowns during growth-driven markets.
For more information on small-capitalization stocks, visit our small-cap category.
Tom Lydon’s clients own shares of IWM.