IJS - XSHQ: A Quality Approach That Works For Small-Caps
2024-04-03 14:25:40 ET
Summary
- Small-caps have struggled in the market due to the risk of "zombie companies" and higher interest rates.
- Invesco S&P SmallCap Quality ETF targets quality within the small-cap universe.
- The XSHQ ETF has outperformed similar ETFs and offers exposure to high-quality small-cap stocks, but comes with higher volatility and expenses.
Small-caps have been one of the most frustrating parts of the marketplace over the last year when looking at broad based averages like the Russell 2000 (RTY), which despite the "bull market" is still trading well below its 2021 peak. Much of this has to do with the risk of so-called "zombie companies" that are small and highly levered being unable to deal with higher for longer rates. If you're going to be a long-term investor in small-caps, you probably want to filed those out. Fortunately, there are funds like the Invesco S&P SmallCap Quality ETF ( XSHQ ) which can help do that for you....
XSHQ: A Quality Approach That Works For Small-Caps