4 Small-Cap ETFs Beating the S&P 500 in 1H
In the first half of 2023, U.S. small-cap stocks showed decent trends but lagged behind the S&P 500 (up about 16%) and Nasdaq Composite (up about 31.7%). The small-cap Russell 2000, an index tracking U.S. small-cap stocks, saw modest gains of around 7.2% during this period. The S&P 600 small-cap ETF (SLY) offered even muted performance of 4% in 1H.
Despite this, small caps have begun to participate in the EPS revisions recovery, with the rate of upward EPS estimate revisions moving up to 50% for the Russell 2000. More than half the sectors in the index were in positive revisions territory for both EPS and revenues, as quoted on a MarketWatch article issued in early June.
The higher rates and the failures of three regional banks in the first quarter of the year has led to the crisis for the small-cap stocks. Against this backdrop, below we highlight a few small-cap ETFs that topped the S&P 500 in 1H.
ETFs in Focus
Janus Henderson Small Cap Growth Alpha ETF (JSML) – Up 24.6%
The underlying Janus Henderson Small Cap Growth Alpha Index selects small-sized capitalization stocks that are poised for smart growth by evaluating each company performance in three critical areas: growth, profitability, and capital efficiency. The Zacks Rank #1 (Strong Buy) charges 30 bps in fees.
Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD) – Up 19.3%
The underlying Janus Henderson Small/Mid Cap Growth Alpha Index selects small- and medium-sized capitalization stocks that are poised for smart growth by evaluating each company performance in three critical areas: growth, profitability, and capital efficiency. The Zacks Rank #1 fund charges 30 bps in fees.
Invesco S&P MidCap Quality ETF (XMHQ) – Up 16.9%
The underlying S&P MidCap 400 Quality Index is designed to provide equal-weighted exposure to approximately 800 securities of medium-sized companies in the larger US equity market. The fund charges 25 bps in fees and has a Zacks Rank #2 (Buy).
Motley Fool Small-Cap Growth ETF (TMFS) – Up 16.8%
Each small-cap company within the fund is carefully selected and, using proprietary 4-point Quality framework. The fund holds 9.5% of its assets in the form of cash. No stock accounts for more than 4.62% of the fund. The fund charges 85 bps in fees.
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Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD): ETF Research Reports
Janus Henderson Small Cap Growth Alpha ETF (JSML): ETF Research Reports
Invesco S&P MidCap Quality ETF (XMHQ): ETF Research Reports
Motley Fool Small-Cap Growth ETF (TMFS): ETF Research Reports
