ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Entrepreneur ETF Channel
  2. Why This Small-Cap ETF Is a Must-Know
Entrepreneur ETF Channel
Share

Why This Small-Cap ETF Is a Must-Know

Tom LydonOct 22, 2020
2020-10-22

Smaller companies are cobbling together some momentum and while basic indexes provide pure beta exposure to small-cap equities, investors can also enhance outcomes with unique strategies, such as the ERShares International Equity ETF (ERSX B+).

“ERSX is now ranked #1 in its category for the past 1 year. We continue to remain optimistic for Entrepreneurial (Disruptor/Innovator) companies going forward—especially in the International Small Cap and HealthCare categories,” according to EntrepreneurShares.

Alone, that’s impressive, but there are other reasons to consider ERSX over the near-term.

“That uncertainty has mostly favored large-cap stocks, as their resilient earnings and strong balance sheets provided a level of comfort for investors daunted by the economic uncertainty,” reports Matthew Fox for Business Insider. “But now, the economy is in a much better place today than it was in the spring, leading LPL to believe that now is a good time to start warming up to small-cap stocks, according to a Monday note from the firm.”

ERSX YTD Performance

Evaluating ERSX: Timing Recession Recovery?

As the U.S. economy rebounds from the coronavirus pandemic, small-cap names could be particularly for investors.

“Given our view that we’re in the early stages of the business cycle and a new bull market, we point out that small cap stocks historically have performed well relative to their large cap counterparts coming out of recessions. The story is the same coming off of major bear market lows where, on average, small caps have outperformed large caps by about 15% during the first year of bull markets, according to a study by Ned Davis Research,” notes LPL.

In recent weeks, small cap equities have been keeping pace their large cap brethren, but before advisors start sticking their clients into these small cap funds, they might want to think twice. While it helps to diversify a client’s portfolio and get the additional upside of small caps, advisors should keep quality in mind.

While small caps can still provide the growth-fueled formula that helped to accelerate the decade-long bull run before the Covid-19 pandemic threw a wrench into those plans, advisors should tread lightly before putting client capital into these funds. This is especially the case now with a lot of market uncertainty still lingering with the pandemic and a forthcoming U.S. presidential election.

Nevertheless, ERSX is positioned to thrive in 2021.

“Case in point, for 2021 small cap earnings are expected to rebound sharply-potentially by 180% based on the latest FactSet estimates-to more than 10% above 2019 levels,” according to LPL.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X