Small-Cap Surprises ETF Style
The revered January Effect is in the books but if small-caps are going to remain in style for the rest of 2012, now is the time to look at some ETFs offering exposure to this market cap spectrum.
And yes, that means digging deeper than the usual suspects such as the iShares MSCI Russell 2000 Index Fund (NYSE: IWM). For those looking for global small-cap opportunities there is the vaunted Market Vectors Brazil Small-Cap ETF (NYSE: BRF) and much, much more.
In other words, there are some pleasant surprises in the world of small-cap ETFs that belong on trading screens and investors' radars now and perhaps for the rest of the year.
IndexIQ U.S. Real Estate Small-Cap ETF (NYSE: ROOF) There might be argument about just how much of a surprise it is that ROOF is having a good year. After all, this is still an environment of depressed interest rates and will remain so for at least another 18-24 months. Basically, Ben Bernanke and friends have forced people to own stocks and with that comes the requisite hunt for yield. That equals a run to REITs. ROOF will celebrate its first birthday in June, but for now it's busy outperforming more popular REIT funds like the Vanguard REIT ETF (NYSE: VNQ).
IndexAustralia Small Cap ETF (NYSE: KROO) Australia and its commodities-rich economy are excellent gauges of risk appetite and the return to risk appetite has been a boon for the iShares MSCI Australia Index Fund (NYSE: EWA) this year. EWA, as has been noted before is not the only kid on the Australia ETF block.
In fact, it must be noted that if risk on is really back with a vengeance, than a preferred option for accessing the land down under would be KROO. At the start of trading today, KROO was up almost 14% year-to-date while EWA was up "just" 9%.
SPDR S&P Small Cap Emerging Asia Pacific ETF (NYSE: GMFS) New ETFs are often met with some amount of consternation, but that has not been the case with the SPDR S&P Small Cap Emerging Asia Pacific ETF. Barely more than a month old, GMFS has been plagued with the typical low volume conundrum faced by many new ETFs, but even on light volume, the unheralded emerging markets play has managed to surge almost 14% since its debut and is sitting at a new all-time high today.
GMFS offers exposure to nine countries, but be advised Taiwan and China represent almost two-thirds of the funds weight.
WisdomTree SmallCap Dividend ETF (NYSE: DES) At least someone else has been talking about DES and that's to be expected in this yield-starved environment. The good news with DES is that it is home to over 600 stocks and with almost $298 million in AUM, it's quite large considering it doesn't grab much press. The bad news is over 52% of the ETF's weight is allocated to financials. At least that's bad news if that group gets smacked down again this year.
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