ALPS O'Shares U.S. Small-Cap Quality Dividend ETF (OUSM) focuses on quality, low-volatility dividend-paying small-cap US companies. OUSM's equity portfolio is well diversified with 106 holdings, including companies like Juniper Networks and New York Times Co. OUSM has outperformed the S&P Small-Cap 600 Value ETF and has a slight edge due to its sector allocation and emphasis on quality.
There's been a lot of talk about the struggles of small-caps. But for the 12 months ending July 3, the average return posted by the widely followed Russell 2000 and S&P SmallCap 600 indexes was 8.3%.
With large-cap growth stocks garnering most of the attention, it's not surprising that many investors are overlooking opportunities in the small-cap value space. Interestingly, for the year ending June 26, the Russell 2000 Value Index modestly outpace the broader Russell 2000.
Small- and midcap stocks have picked up some notable interest of late. But what kind of strategy can get the best out of small-cap stocks?
As measured by the Russell 2000 Index, small-caps have barely offered any upside this year. That indicates the asset class hasn't been worth the risk relative to large-caps.
The ALPS O'Shares U.S. Small-Cap Quality Dividend ETF (OUSM) made its debut on 12/30/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Blend category of the market.
Small cap opportunities may be hard to find amid a higher for longer interest rate regime. Often, smaller firms, particularly in tech, are valued based on future revenue and take on big debt to develop more revenue later.