The ProShares UltraPro Short Russell2000 (SRTY) was launched in 2010 with the goal of achieving three times the opposite daily performance of the Russell 2000 Index. The fund, which has about $70 million in assets, provides traders with a low-cost way to obtain short exposure to small-cap firms including Etsy, Inc. (ETSY) and specialized bargain retailer Five Below, Inc. (FIVE). On most days, SRTY trades around 700,000 shares, with a tight 0.05 percent average spread to keep slippage to a minimum. The ETF has fallen 43.34 percent YTD as of Sept. 23, 2019, with an expense ratio of 0.95 percent and a dividend yield of 1.48 percent.
Last week, SRTY’s stock temporarily fell below a six-month trading range, but it quickly recovered and closed above its lower support level of $22 on Friday, indicating a likely head-fake move to shake off weak hands. Before entering a long position, traders may want to wait for the moving average convergence divergence (MACD) line to cross above its signal line for additional confirmation of an upside reversal. Those that do enter should consider putting their stops below the Sept. 13 low of $21.20 and taking profits around key overhead resistance at $28.
What is the best way to purchase the Russell 2000 Index?
You don’t have to buy all 2,000 stocks in the Russell 2000 Index to invest in it. You can invest in the index through a mutual fund or an exchange-traded fund (ETF) that tracks it passively.
The Vanguard Russell 2000 ETF (NASDAQ:VTWO), for example, invests in all of the stocks in the index based on their relative weights. Fees are modest, with a 0.10 percent expense ratio, thus the fund’s long-term performance should be almost comparable to that of the index.
Is there a Russell 2000 ETF from Schwab?
Schwab U.S. Small-Cap is a market-cap-weighted index of U.S. stocks with market values ranging from $125 million to $6 billion. Tangoe (TNGO), an information-technology services corporation, is one of the more obscure assets. However, compared to funds that track the Russell 2000 index, which is a more frequent small-cap benchmark, the portfolio favors mid-cap equities. According to Morningstar, the Schwab fund has 16 percent of its assets in midsize companies, compared to 3 percent for the iShares Russell 2000 ETF (IWM).
The Schwab fund’s bias toward mid-cap firms may help it weather market downturns a little better. The ETF, for example, lost 3.1 percent in 2011, a middling year for stocks, compared to the iShares fund’s loss of 4.4 percent. The Schwab ETF has outperformed the iShares fund by an average of 0.8 percentage point every year over the last five years.
The ETF’s biggest holdings are companies in the technology, industrial, and financial services sectors, which account for 46 percent of its assets. Computer distributor Ingram Micro (IM), commercial banker PacWest Bancorp (PACW), and ON Semiconductor were among the top holdings at the time of our previous check (ON).
What exactly is the Small Cap Bear ETF?
The investment seeks daily investment returns that are 300 percent of the inverse (or reverse) of the Russell 2000 Index’s daily performance, before fees and expenses. The fund invests in swap agreements, futures contracts, short positions, or other financial instruments that, when combined, provide inverse (opposite) or short leveraged exposure to the index of at least 80% of the net assets of the fund (plus borrowing for investment purposes). Based on a mix of their market capitalization and current index membership, the index tracks the performance of about 2,000 small-capitalization businesses in the Russell 3000 Index. It isn’t well-balanced.
What is the spy ETF’s inverse?
A -3x ETF is also available. The ProShares UltraPro Short S&P500 (SPXU) provides daily returns that are -3 times that of the S&P 500. This ETF’s value will increase by around $3 if the index lowers by $1. This ETF has almost $1 billion in assets and a 0.91 percent cost ratio. Because its expense ratio is just slightly higher than that of the -1x ETF above, bears placing a short-term bet on an oncoming crash may choose to use this -3x ETF to get the most bang for their dollars.
What is a leveraged exchange-traded fund?
A leveraged exchange-traded fund (ETF) is a marketable product that leverages the returns of an underlying index by using financial derivatives and loans. A leveraged exchange-traded fund may aim for a 2:1 or 3:1 ratio, whereas a regular exchange-traded fund normally tracks the equities in its underlying index one-to-one.
Most indices, such as the Nasdaq 100 Index and the Dow Jones Industrial Average, include leveraged ETFs (DJIA).
Is the Russell 2000 weighted?
The Russell 2000 index, unlike the Dow Jones Industrial Average (DJIA), is weighted by the number of shares outstanding. This means that the index is influenced by the last sale price of a member stock as well as the amount of shares that can actually be exchanged (rather than the company’s whole market capitalization).
Other Russell 2000 variants track the performance of corporations with unique characteristics. The Russell 2000 Growth Index, for example, tracks the performance of Russell 2000 businesses with greater price-to-value ratios and higher growth forecasts.
Does the Russell 2000 index include the S&P 500?
The S&P 500 index is a stock market index that includes 500 businesses with a market capitalization of more than $1 billion. The Russell 2000 index is a stock market index that includes 2,000 businesses with a market capitalization of less than $1 billion. The Russell 2000 is widely used as a small-cap proxy, whereas the S&P 500 is utilized as a large-cap benchmark.
