RWJ’s revenue-weighted methodology leads to significant sector-level differences relative to traditional small-cap strategies. For example, at the end of the second quarter, RWJ allocated about 51% of its combined weight to the consumer discretionary and industrial sectors. Those sectors combined for less than 35% of the S&P SmallCap 600.
At the end of the second quarter, RWJ was also underweight healthcare, technology and financial services names relative to S&P SmallCap 600. However, RWJ’s price-to-earnings ratio was significantly below that of the S&P benchmark at the end of June, according to issuer data.
With its recent surge, RWJ trades about 5% above its 50-day moving average and more than 2% above its 200-day line. The ETF resides just 4% below its 52-week high.
For more information on small-capitalization companies, visit our small-cap category.