Small-cap ETFs for Canadian investors

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’s a look at three ETFs that meet that criteria. Meantime, please see the Supplement on page 80 for more on small caps in general. ISHARES S&P/TSX SMALL CAP INDEX ETF $19.46 (Toronto symbol XCS; TSINetwork ETF Rating: Aggressive; Market cap: $186.3 million) provides exposure to smaller companies listed in Canada. The fund tracks the S&P/TSX Small Cap Index. Specifically, that index focuses on listed Canadian companies that have a market value between $100 million and $1.5 billion. The main industry segment allocations are Basic Materials (25.9%), Energy (15.7%), Industrials (12.1%), Real estate (10.6%), Financial Services (9.0%), Health Care (8.2%), and Consumer Discretionary (6.8%). The ETF holds 236 companies, with 13% of the assets allocated to the top 10 stocks. They…

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