Three Top Small-Cap ETF Investments for 2019


By: Ian Cooper
08:39 04/24/2019

Like most investors, one of your top goals has been to enjoy a financially secure retirement at whatever age you choose. That being the case, it stands to reason that your retirement “nest egg” should ideally generate above-market returns, often with below-market risk.

I’ve found that small-cap stocks offer the best opportunities.

When a crazed global landscape is fueling the appeal of domestic, small-cap stocks that tend to be insulated from the threat of trade war and a strong dollar for example.

Tax cuts and deregulation have boosted small cap stocks because smaller companies derive revenue domestically.

JPMorgan U.S. equity strategist Dubravko Lakos-Bujas, as quoted by Forbes even noted, “We continue to recommend small-caps as a ‘catch-all trade’ for its high cyclical, reflation and tax policy exposures, as well as lower sensitivity to ongoing trade risk.”

To gain the most exposure to small cap stocks, ETFs are an option.

Each offers diversification among some of the top small cap stocks in the market.

Instead of spending thousands of dollars diversifying, you can spend a fraction of the cost on an ETF that offers ample exposure.

iShares Russell 2000 ETF (IWM)

Between November 2016 and August 2018, the IWM rallied from a low of $1115 to $168 mostly on the heels of President Trump’s tax plan. The IWM hold trades in Five Below (FIVE), Etsy Inc. (ETSY), Cree Inc. (CREE) and Entegris Inc. (ENTG) for example.

iShares S&P Small Cap 600 Growth ETF (IJT)

Between November 2016 and August 2018, the IJT ran from $125 to $201. The IJT holds trades in Trex Inc. (TREX), Neogen Corporation (NEOG), Stamps.com Inc. (STMP) and Green Dot Corporation (GDOT) for example.

iShares Core S&P Small Cap ETF (IJR)

Between November 2016 and August 2018, the IJR ETF ran from $57.50 to $88. The ETF has holdings in Ligand Pharmaceuticals (LGND), Neogen Corporation (NEOG), CACI International (CACI) and HealthEquity Inc. (HQY) for example.


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