Talking Technology The Small-Cap Way
Small-cap stocks will finish 2019 as laggards relative to their large-cap counterparts. With just a few trading days left in the year, the S&P 500 is higher by 31.70 percent, well ahead of the average gain of 24.65 percent for the Russell 2000 and S&P SmallCap 600 indexes.
An obvious problem for small-cap benchmarks and the passive exchange traded funds (ETFs) that track them is lack of technology exposure. Both of the aforementioned small stock indexes allocate less than 14 percent of their weight to tech names with an average weight of just 13.70 percent. Conversely, the S&P 500 devotes about 23.10 percent of its roster to tech fare, so with the likes of Apple (AAPL) and Microsoft (MSFT) soaring this year, it's not surprising that small-cap benchmarks are lagging.
The Invesco S&P SmallCap Information Technology ETF (PSCT) can help investors solve the small-cap tech conundrum. Fresh of an all-time high on Thursday, PSCT is higher by 40.20 percent in 2019, easily trouncing the aforementioned, broader small equity indexes.