4 min readBy Beqa Bumbeishvili ETF Insider
How does the SMEZ ETF work?
The SMEZ ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The PBSM ETF, managed by MSCI Inc., seeks to replicate the performance of the small-capitalization segment of the U.S. equity market. The ETF invests at least 90% of its total assets in securities comprising the Underlying Index, which represents approximately 14% of the free float-adjusted market capitalization in the United States. With a focus on full replication, PBSM provides investors with diversified exposure to this segment of the market, utilizing a market-capitalization weighted methodology.
While the primary objective of the Invesco PureBeta MSCI USA Small Cap ETF (PBSM) is to track the performance of the small-capitalization segment of the U.S. equity market, it also reflects the dividend distribution of the underlying PureBeta MSCI USA Small Cap Index. Dividend distributions are influenced by the dividend policies and performances of constituent companies within the index and are typically made quarterly. Investors looking for exposure to small-cap stocks in the U.S. market may find PBSM suitable for potential capital appreciation alongside some dividend returns.
Tracking the small-capitalization segment of the U.S. equity market is the primary focus of the PBSM ETF. This exchange-traded fund seeks to replicate the performance of the Underlying Index, which is meticulously maintained and calculated by MSCI Inc. Comprising approximately 14% of the free float-adjusted market capitalization in the United States, the Underlying Index consists of 1,951 securities with diverse market capitalizations. PBSM employs a full replication methodology, investing in all securities within the Underlying Index in proportion to their weightings. With its commitment to tracking the index accurately, PBSM offers investors exposure to the dynamic small-cap sector of the U.S. market.
The correlation aspect of the Invesco PureBeta MSCI USA Small Cap ETF (PBSM) is crucial for investors to understand how it behaves relative to the broader small-capitalization segment of the U.S. equity market. Given that PBSM tracks the MSCI USA Small Cap Index, its correlation with this segment of the market is expected to be strong. Investors can utilize PBSM's correlation with other assets and sectors to gauge its effectiveness for diversification and risk management within their investment portfolios.
The Principal U.S. Small-Cap Multi-Factor Index ETF (PBSM) is heavily involved in the small-capitalization segment of the U.S. equity market. Comprised of approximately 1,951 securities, the ETF seeks to track the performance of this market segment with a focus on securities ranging from $18.4 million to $15.5 billion in market capitalization. The fund employs a full replication methodology, meaning it invests in all securities comprising the Underlying Index, weighted by their free float-adjusted market capitalization. While PBSM aims to provide exposure to small-cap companies, it maintains diversification within its portfolio, abiding by guidelines under the Investment Company Act of 1940.
The exposure characteristic of the Invesco PureBeta MSCI USA Small Cap ETF (PBSM) underscores its dedication to the small-capitalization segment of the U.S. equity market. By tracking the MSCI USA Small Cap Index, PBSM offers investors access to a diverse array of small-cap stocks, which represent approximately 14% of the free float-adjusted market capitalization in the United States. With a focus on replicating the index through a full replication methodology, PBSM provides investors with a comprehensive approach to capturing the performance of small-cap stocks within the U.S. market.
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