The stock market may have started 2024 down, but that doesn’t mean investors have to. Indeed, while the broader market whimpers amid soft China data and still-lingering fear of a slowdown, some areas see major opportunities. Perhaps none is as accessible and intriguing as the attractive discount found in small-cap stocks. The right ETF investing in small caps could, then, make for a solid option for investors looking to start the year off right.
Smaller stocks are looking at some of the largest discounts relative to their larger peers since 2010. They’ve trailed some larger firms amid the post-GFC low interest rate regime that birthed some of those megacap tech firms. With U.S. stocks remaining expensive overall in a market shadowed by lingering inflation and a higher for longer rate regime, then, finding the right small caps could boost portfolios.
Quality Small Cap ETF OUSM
That’s where a strategy like the ALPS O’Shares US Small-Cap Quality Dividend ETF (OUSM) can play a role. OUSM tracks the O’Shares US Small-Cap Quality Dividend Index, which not only exposes it to dividends that could bounce back this year themselves, but also to smaller firms that meet a quality standard.