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Garrett Motion's E-Cooling compressor wins first commercial production award for electric buses and trucks.
Hartford Multifactor Small Cap ETF is a small-cap multifactor fund that emphasizes quality, value, momentum, and low volatility. Its expense ratio is 0.34% and the ETF has $33 million in assets under management. Despite ROSC's relative unpopularity, its returns have been solid. Since its Index change, it's easily outperformed the Russell 2000 and Russell 2000 Value Indexes. Its quality screens are most likely responsible. My fundamental analysis revealed a 14% ROE compared to 4-5% for these benchmarks.
The Russell 2000 has entered positive territory for the year as small caps rallied on a cooler-than-expected October CPI report. While the style-pure small-cap benchmark has clawed back its year-to-date losses, it's being handily outpaced by Hartford Funds' multifactor small cap ETF.
Many investors are divesting from small-caps in fear of a recession, but that may not be the best strategy. Small-caps are inherently more volatile than their larger-cap peers.
Small-cap stocks closed last week on a high note, partially offsetting some of September's declines. The Hartford Multifactor Small Cap ETF (ROSC) gained 1.3% last week, ending the month down just under 5%.
History suggests value stocks will continue to be well positioned in the current economic environment. The current economic environment is characterized by above-average inflation and widening market breadth.
Volatility is a key concern for investors in small-cap stocks, particularly during periods of market turbulence. Investors sitting out small-cap exposure, however, are missing out on attractive returns and enhanced diversification.
Small caps are showing their strength this month, positioning for a rebound during the second half of 2023. A key trend during the first half was the strong outperformance from large-cap stocks.