Small-cap ETFs aim for growth

Article Excerpt

Smaller firms can sometimes generate higher returns than their larger counterparts, but they are often riskier, less liquid, and may underperform for long periods. One way to offset some of the risk is to focus on ETFs that hold top-quality small-capitalization companies. Here we look at two small-cap ETFs. While each fund holds thousands of stocks, the average market size of companies held by the first ETF is $4.1 billion; the average for the second is $1 billion. That helps to cut their risk. (See the supplement on page 29 for more on small caps.) VANGUARD SMALL-CAP ETF $145 (New York symbol VB; TSINetwork ETF Rating: Aggressive; Market cap: $21.6 billion) tracks an established index of smaller U.S. companies covering a broad range of industries. • Canadian small-cap ETFs often hold a preponderance of resource stocks • U.S. small cap stocks may beat large stocks— but come with added risk • Focusing on quality small companies can improve returns The fund holds about 1,400…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.