Small cap ETFs are generally made up of investments in companies with less than $1 billion in market capitalization. Small Cap Growth ETFs offer investors diversification throughout a wide range of industries and the potential for very high returns. At the same time, these ETFs tend to move up and down with the market and are subject to high levels of volatility.
US Small Cap Growth ETFs, represented by the iShares Russell 2000 Small Cap Growth Index ETF (IWO), continued to outperform other styles of US Equity Assets with a one week return of 2.66% and a trend score of 13.93%. The small cap growth sector has also outperformed other US Equity Assets over a 52 week period, returning 24.31% in the past year. (See Russell Table)
US Equity Style Return
4/29/2011
| Assets Class | Symbols | 04/27 Trend Score | 04/20 Trend Score | Direction |
|---|---|---|---|---|
| Russell Smallcap Growth | IWO | 14.01% | 13.06% | ^ |
| Russell Midcap Growth | IWP | 12.57% | 11.91% | ^ |
| Russell Smallcap Index | IWM | 11.05% | 9.92% | ^ |
| Russell Midcap Indedx | IWR | 10.9% | 10.15% | ^ |
| Russell Midcap Value | IWS | 9.84% | 9.03% | ^ |
| Russell Largecap Growth | IWF | 9.25% | 8.24% | ^ |
| Russell Smallcap Value | IWN | 8.56% | 7.26% | ^ |
| Russell Largecap Index | IWB | 8.52% | 7.38% | ^ |
| Russell Largecap Value | IWD | 8.15% | 6.96% | ^ |
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
U.S. Small Cap Growth
04/29/2011| Description | Symbol | 1 Yr | 3 Yr | 5 Yr | Avg. Volume(K) | 1 Yr Sharpe |
|---|---|---|---|---|---|---|
| Vanguard Small Cap Growth ETF | VBK | 27.33% | 10.31% | 6.52% | 248 | 121.29% |
| iShares Russell 2000 Growth In | IWO | 26.68% | 9.57% | 4.89% | 1,679 | 119.24% |
| iShares S&P SmallCap 600 Growth | IJT | 24.47% | 8.6% | 5.17% | 187 | 121.82% |
Among US Small Cap Growth ETFs, the Vanguard Small Cap Growth ETF (VBK) has shown the most strength, returning 27.33% in the past year. Others, including the iShares Russell 2000 Growth Index ETF (IWO) and the iShares S&P SmallCap 600 Growth ETF (UT) have also provided investors with returns higher than 24%.
In recent periods, equities have experienced high levels of growth, leading many to speculate that a retraction is inevitable. If equity markets begin to lose value, US Small Cap Growth ETFs will certainly be impacted, as the performance of these ETFs correlate with general market conditions. Still, investors should expect strong returns from ETFs in this sector for the foreseeable future.
Symbols: VBK, IWO, IJT, IWO, IWM, IWR, IWS, IWF, IWN, IWB, IWD
Tickers: VBK IWO IJT IWO IWP IWM IWR IWS IWF IWN IWB IWD
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
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