We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In this episode of ETF Spotlight, I speak with Phil McInnis, Chief Investment Strategist at Avantis Investors, about investing in small-cap and value stocks.
Investors piled into small-cap stocks when the June inflation report increased the odds of interest rate cuts by the Fed. Some investors sold the Magnificent Seven stocks, including the high-flying NVIDIA (NVDA - Free Report) , and bought into cheaper areas of the market.
An unexpectedly weak July jobs report has raised fears of a hard landing that would hurt smaller companies. Small caps, particularly lower-quality stocks, have sold off again over the past week.
After years of underperformance, small caps now appear very attractively valued. The difference in valuations between the two groups is the widest it has been in over 20 years, according to some measures.
Since its inception in May 2000, the iShares Core S&P SmallCap 600 (IJR - Free Report) has delivered a much higher return compared to the iShares Russell 2000 ETF (IWM - Free Report) . According to a study performed by S&P Dow Jones Indices, the return differences were primarily due to the inclusion of a profitability factor embedded in the S&P SmallCap 600.
The Avantis U.S. Small Cap Value ETF (AVUV - Free Report) , which selects firms with low valuations and higher profitability ratios, has outperformed not only the Russell 2000 index but also the S&P index since its inception in 2019.
The Avantis U.S. Small Cap Equity ETF (AVSC) has also significantly outperformed its benchmark. The Avantis U.S. Large Cap Value ETF (AVLV - Free Report) includes Apple (AAPL - Free Report) , Meta (META - Free Report) and Amazon (AMZN - Free Report) among its top holdings.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Small-Cap Stock Investing: Why Quality Matters
In this episode of ETF Spotlight, I speak with Phil McInnis, Chief Investment Strategist at Avantis Investors, about investing in small-cap and value stocks.
Investors piled into small-cap stocks when the June inflation report increased the odds of interest rate cuts by the Fed. Some investors sold the Magnificent Seven stocks, including the high-flying NVIDIA (NVDA - Free Report) , and bought into cheaper areas of the market.
An unexpectedly weak July jobs report has raised fears of a hard landing that would hurt smaller companies. Small caps, particularly lower-quality stocks, have sold off again over the past week.
After years of underperformance, small caps now appear very attractively valued. The difference in valuations between the two groups is the widest it has been in over 20 years, according to some measures.
Since its inception in May 2000, the iShares Core S&P SmallCap 600 (IJR - Free Report) has delivered a much higher return compared to the iShares Russell 2000 ETF (IWM - Free Report) . According to a study performed by S&P Dow Jones Indices, the return differences were primarily due to the inclusion of a profitability factor embedded in the S&P SmallCap 600.
The Avantis U.S. Small Cap Value ETF (AVUV - Free Report) , which selects firms with low valuations and higher profitability ratios, has outperformed not only the Russell 2000 index but also the S&P index since its inception in 2019.
The Avantis U.S. Small Cap Equity ETF (AVSC) has also significantly outperformed its benchmark. The Avantis U.S. Large Cap Value ETF (AVLV - Free Report) includes Apple (AAPL - Free Report) , Meta (META - Free Report) and Amazon (AMZN - Free Report) among its top holdings.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of the ETF Spotlight and remember to subscribe! If you have any comments or questions, please email podcast@zacks.com.