Investing.com | Jun 29, 2023 06:01AM ET
While the technology-focused Nasdaq and the Japanese Nikkei 225 have had all the attention due to their impressive rallies this year, it's important to redirect our focus towards another category of stocks that have been performing exceptionally well, particularly in recent times.
Enter the realm of small-cap companies. These companies, with market capitalizations typically ranging between $300 million and $2 billion in the United States, have demonstrated strong performance relative to the broader market.
In Europe, the threshold for defining a company as a small cap would be €3 billion. Beyond these levels, we find mid-cap and large-cap companies.
In the United States, small companies constitute over 60% of the market, while in Europe, their representation is slightly above 50%. This highlights the significance of the small-cap sector, making it an area worth monitoring.
Various small-cap indexes exist to track the performance of these companies. In Europe, small caps can be tracked by the EURO STOXX Small Cap, while in the United States by the S&P 600 Small Cap and the US Small Cap 2000.
Investing in small caps can be accomplished through specialized investment vehicles such as mutual funds and ETFs. Here are a few examples:
Invesco S&P SmallCap 600 Pure Value ETF (NYSE:RZV)
SPDR S&P Emerging Markets Small Cap ETF (NYSE:EWX)
A compelling illustration of the strength of small caps lies in the S&P 600 Small Cap ETF (NYSE:SLY) which significantly outperformed the S&P 500 in June. In fact, the majority of small-cap stocks have experienced notable growth this month.
Interestingly, the IFA U.S. Small Company index has delivered an impressive annual return of +11.1% since 1928, outperforming the +9.9% annualized gain of the S&P 500 over the same period.
Now, let's examine a selection of highly promising small-cap stocks that are experiencing robust growth this June. To conduct our analysis, we will leverage
As of 06/20/2023, InvestingPro is on sale!
Enjoy incredible discounts on our subscription plans:
Don't miss this limited-time opportunity to access cutting-edge tools, real-time market analysis, and expert opinions.
Join InvestingPro today and unleash your investment potential. Hurry, the
Disclaimer: This article was written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel, or recommendation to invest, nor is it intended to encourage the purchase of assets in any way.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.