Small-cap stock funds have been rocketing as investors bail out of industrials and other big-cap ETFs amid heightened trade-war fears. X SPDR Industrial Select Sector (XLI) finished flat on Wednesday, after sliding nearly 5% in the past week. That includes a 2% drop Tuesday, when President Trump rattled the stock market with his threat to slap tariffs on another $200 billion of Chinese goods. The fund is down 3% this year. SPDR Dow Jones Industrial Average (DIA), whose components include trade-war-sensitive blue chips such as Boeing (BA) and Caterpillar (CAT), is flat for the year. It fell 1% Tuesday and is testing support at its 50-day moving average. But small caps are moving in the opposite direction. Investors see smaller domestic companies, which make most of their profits in the U.S., as a safer play than global big caps. IBD Newsletters Get exclusive IBD analysis and action news daily. SIGN UP NOW! IBD Newsletters Get exclusive IBD analysis and action news daily. … [Read more...] about 5 Ways To Profit As Trump Threats Boost Small-Cap Stock Plays
Small cap stocks index
Small caps grabbed the spotlight during the past month, taking the top three positions among U.S. diversified stock ETFs based on year-to-date gains. X First Trust Small Cap Growth AlphaDEX (FYC) topped the list with a 16.2% YTD return through June 13, according to Morningstar Direct. Shares are extended from a 45.48 buy point cleared last month. The $295.3 million fund, which tracks the Nasdaq AlphaDEX Small Cap Growth Index, advanced 7.3% in the past month. Health care accounted for the biggest sector weight as of June 14 at nearly 28% of assets, followed by 20% in information technology, 15% each in consumer discretionary and industrials, and 11% in financials. World Wrestling Entertainment (WWE), Taser stun-gun maker Axon Enterprise (AAXN), home furnishings retailer RH (RH), software maker Twilio (TWLO) and health care services provider Teladoc (TDOC) were among its top holdings. Can Fidelity Succeed In ETFs? Julex Capital's Favorite Late-Cycle ETF Picks What Are The Top … [Read more...] about Small-Cap Stocks Rocket Higher; Top China Fund Nears Buy Point
ETF investors haven't been this "America first" since Donald Trump won the presidential election — at least if flows to small-cap companies are any guide. X Last month, roughly $7.5 billion poured into exchanged traded funds focused on small-cap stocks, the most since November 2016, according to data compiled by Bloomberg Intelligence. What's driving the activity? A confluence of goodies for domestically oriented companies, as tax overhaul benefits kick in amid trade tiffs and a stronger U.S. dollar, all of which makes them more attractive than big international companies. "I think there's just been this desire to kind of hunker down in more domestically oriented companies that are more immune to the trade disputes," said Liz Ann Sonders, chief investment strategist at Charles Schwab. IBD Newsletters Get exclusive IBD analysis and action news daily. SIGN UP NOW! IBD Newsletters Get exclusive IBD analysis and action news daily. Tech Report Market Prep … [Read more...] about Small-Cap Stock Boom Spurs Most Inflows Since Trump Victory
By Caroline Valetkevitch and April Joyner NEW YORK (Reuters) - U.S. small-cap stocks look poised to extend a breakout rally, especially if oil prices advance deeper into levels last seen in 2014 to drive further gains in the small energy companies that have provided leadership in recent week, analysts and investors said. The Russell 2000 index of small capitalization stocks closed at a record high for a third day in a row on Friday and registered its third week of gains, sharply outperforming large-cap stocks on Wall Street, with all three major indexes posting losses for the week. The Russell is up 11.1 percent since its Feb. 8 low for the year, while the S&P 500 is up just 5.1 percent since that date. The S&P 600 small-cap index is also at a record high. Energy shares within the S&P 600 have led recent gains, thanks to a jump in oil prices, which analysts said should boost earnings forecasts for the sector. The outperformance of small-cap stocks has been driven partly by … [Read more...] about Energy may give further impetus to U.S. small-cap stocks
Matthew Frankel, The Motley Fool Published 7:00 a.m. ET May 1, 2018 CLOSE The nine-year stretch of rising stock prices won’t last forever. So now’s a good time for investors to bear-proof their 401(k)s before the next financial storm. USA TODAY Or is this common theory wrong? Question: I'm 30 and selecting my 401(k) investments. Should I put most of my money in a small-cap stock fund, since they tend to beat large-cap funds over time? Answer: The idea that a given group of small-cap stocks will outperform a group of large-cap stocks over time certainly makes sense. After all, small-cap companies tend to have much more room to grow. In other words, it's typically far easier for a company with a $1 billion market cap to double in size than it is for, say, Microsoft. However, while the common perception is that small caps tend to outperform large caps, the data doesn't entirely support that view. In fact, from 1979 through 2015, the broad small-cap Russell … [Read more...] about Investing Q&A: Do small-cap stock funds beat large-cap funds?