Small-cap exchange traded funds have betrayed their reputations as credible beneficiaries of the stronger U.S. dollar. The iShares Russell 2000 ETF (NYSE: IWM) and the iShares Core S&P Small-Cap ETF (NYSE: IJR) are up an average of just 1.5 percent year-to-date while the S&P 500 is higher by 2.2 percent.
The theory is that smaller companies should thrive when the dollar rises because these companies generate the bulk of their revenue within the confines of U.S. borders. Slack performances turned in by small-cap ETFs indicate smaller stocks have been vulnerable to rising real interest rates, perhaps the biggest contributor to dollar strength.
There are no guarantees that small-caps will remain unresponsive to the strong dollar and if the situation reverses, investors should be prepared. The WisdomTree SmallCap Dividend Fund (NYSE: DES) is an ETF that helps with that preparation. DES tracks the fundamentally-weighted WisdomTree SmallCap Dividend ...
/www.benzinga.com/trading-ideas/long-ideas/15/08/5770843/a-small-cap-dividend-etf-with-a-strong-dollar-angle alt=A Small-Cap Dividend ETF With A Strong Dollar Angle>Full story available on Benzinga.com
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