Investors looking to dial up their risk-reward profile typically consider targeting small publicly traded enterprises that offer robust upside potential. Of course, the main threat to this framework is volatility. While that risk can never be completely mitigated, the AlphaMark Actively Managed Small Cap ETF (SMCP) provides market speculators with a more sensible platform.
Fundamentally, the SMCP exchange-traded fund offers two core advantages. Firstly, AlphaMark is actively managed, which means that the investment vehicle is guided by a professional. As market conditions change, the SMCP may navigate around certain pitfalls. Secondly, the ETF encompasses a wide range of individual enterprises. Therefore, no one company will completely sink the portfolio.
Generally, small-capitalization firms have not always performed well. One of the headwinds impacting the ecosystem have been elevated benchmark interest rates. According to Reuters1, small caps started surging in late 2023 – as reflected by the rising per-unit price of SMCP – due to speculation of incoming rate cuts. However, the acceleration eventually faded as inflationary pressures stubbornly stood their ground.
Nevertheless, some relief in this department could possibly be on the way. Based on the latest information 2 from the Labor Department, while the number of new applicants for jobless claims decreased from the prior week, the total number of people requesting some form of government assistance increased. This dynamic suggests that the red-hot labor market is beginning to cool.
Naturally, the framework presents a possible incentivization for the Federal Reserve to present a more accommodative or dovish shift in monetary policy. If so, that could potentially reignite sentiment in small-cap entities, which may have a positive effect on SMCP.
Presently, the top holding of the fund is Abercrombie & Fitch Co. (NYSE:ANF), an omnichannel retailer of popular apparel brands. ANF represents 1.48% of the small-cap fund. Coming in second place is Fabrinet (NYSE:FN), an enterprise in the electronic components segment that provides optical packaging and precision manufacturing services. It carries a fund weighting of 1.38%.
Rounding out the top three is Neogen Corporation (NASDAQ:NEOG), which falls under the diagnostics and research sector of the ...Full story available on Benzinga.com
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