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. ESG Channel
  2. For Small-Cap Rebound Idea, Look To ESIX
ESG Channel
Share

For Small-Cap Rebound Idea, Look To ESIX

Tom LydonNov 29, 2022
2022-11-29

This is the time of year when investors start getting optimistic about how stocks will close the year while focusing on expectations for better equity market performance in the following year. There’s evidence that good times could be emerging, as highlighted by a 5.33% gain by the S&P 500 over the past month. Small-cap stocks are performing slightly better, as highlighted by a 5.66% jump by the S&P SmallCap Index over the same period. That could be a sign that the SPDR S&P SmallCap 600 ESG ETF (ESIX ) is primed for more upside over the coming weeks and into 2023.

ESIX follows the environmental, social, and governance (ESG) offshoot of the S&P SmallCap 600 Index and could be an ideal avenue for investors seeking the often-elusive combination of the growth prospects offered by small-cap equities, along with a dash of quality — something that’s not always a hallmark of old guard small-cap gauges.

“Last year we said small-cap Quality was historically mispriced, but did not think the macro environment favored small caps over large caps,” noted Wells Fargo in a recent report. “Going forward, we still believe in a High Quality approach, and we now expect small caps to outpace large caps.”

ESIX is designed to be a fraternal twin of sorts to the standard S&P SmallCap 600 index funds and ETFs with an ESG overlay, but that overlay is meaningful because it trims the ESIX lineup to 381 holdings. Still, that’s an expansive lineup when it comes to small-cap ESG ETFs and one that provides investors with ample diversification. ESIX also has the depth necessary to position investors to capitalize on small-cap earnings growth.

“In general, we are taking a ‘FIFO approach’ to EPS revisions and believe companies that are already managing down expectations offer a slightly better risk/reward, all else being equal,” according to Wells Fargo.

An overlooked point in ESIX’s favor is that it’s levered to a potential small-cap growth rebound because the SPDR ETF allocates about 36% of its weight to technology, consumer cyclical, and healthcare stocks.

However, the broader small-cap space, including the aforementioned growth groups, are offering unusual value today. In fact, over the past two decades, there have been just nine examples of small-cap equities, broadly speaking, trading 20% below long-term averages. That’s the case today.

ESIX charges just 0.12% per year, or $12 on a $10,000 investment, and none of its holdings exceed a weight of 0.90%.

For more news, information, and strategy, visit the ESG Channel.

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