The first cut is the deepest — so they say. As with all complicated relationships, this mantra may certainly ring true for the Federal Reserve and the markets — at least from a psychological standpoint.
Upcoming interest rate cuts have small-cap ETFs primed to outperform.
The Federal Reserve is expected to make its first rate cut since 2020 later this month. The rate cut should make it easier for smaller companies to borrow and grow their bottom lines.
Rate cuts, after so much back and forth, appear imminent following Fed Chair Jay Powell's most recent comments at Jackson Hole. That many see many ETF investors on the hunt for the right strategy to benefit from the unwinding of the last two years' rate regime.
Because of how it's structured, the S&P 500 index is increasingly reliant on just a few companies for its performance. Economic indicators suggest some ETFs out there could outperform the S&P 500.
Friday's disappointing jobs report has put a huge damper on economic sentiment for the moment. Goldman Sachs has bumped up the odds of a recession from 10% to 25% over the next 12 months.
Investors can use plenty of data points to assess ETF momentum from tech charts to returns, but perhaps the most obvious may be the simple measure of flows. Indeed, flows can help tell what markets are thinking about, if read correctly.
Investors can use plenty of data points to assess ETF momentum from tech charts to returns, but perhaps the most obvious may be the simple measure of flows. Indeed, flows can help tell what markets are thinking about, if read correctly.
Concentration risk in the S&P 500 and expected falls in short-term rates make it a good time to invest in small caps. Avoid investing in ETFs that passively track the Russell 2000 Index due to flaws in their construction and seasonal factors. Avantis US Small Cap Value ETF has outperformed the S&P 500, making it a recommended investment for small caps.
On this week's episode of ETF Prime, host Nate Geraci sat down with VettaFi Editor-in-Chief Lara Crigger to look at the recent rotation into small-cap stocks. Later, Geraci welcomes Bitwise Asset Management CIO Matt Hougan to discuss the investment case for the newly launched spot ether ETFs.
It's midsummer, and U.S. small-caps have finally showed up in a big way. You could say it's been a long time coming.
Avantis Investors' active small-cap value ETF can be used to enhance portfolios. The Avantis U.S. Small Cap Value ETF (AVUV) has historically provided better returns compared to the small-cap value benchmark, while also providing benefits such as growth potential and enhanced diversification.