The Direxion Value Line Mid- and Large-Cap High Dividend ETF (NYSEARCA:VLML) and the Direxion Value Line Small- and Mid-Cap High Dividend ETF (NYSEARCA:VLSM) both use a modified equal-weighting approach and target companies paying “above average” dividends in their selected market caps.
The Direxion Value Line Conservative Equity ETF (NYSEARCA:VLLV) will track a basket of funds with a strong Safety Ranking, created by Value Line to measure how a stock is likely to weather a market downturn.
Among those cut is the SPDR Barclays Capital Aggregate Bond (NYSEARCA:LAG), which now charges 0.1% per year, down from 0.21%, and making it more competitive with AGG and BND.
SSgA's (NYSE:STT) ten international ETFs - a group including IPD, IPW, and IPK - now have annual fees of 0.4% vs. 0.5% previously. The emerging markets ETFs' - including EDIV and GML - new expense ratios are 0.49%, down from 0.50-0.59% previously.
Some of the fee reductions are more dramatic: The SPDR 1500 Value Tilt ETF (NYSEARCA:VLU) and the SPDR S&P 1500 Momentum Tilt ETF (NYSEARCA:MMTM) are cut to 0.12% from 0.35%, and the SPDR Russell 2000 Low Volatility ETF (NYSEARCA:SMLV) is cut to 0.12% from 0.25%.
Today's decline in the Russell 2000 (IWM -1.4%) puts it more than 10% below the level hit in March (and in July). The index fell 6% in September alone.
For the year, the Russell is lower by 6.6% after gaining nearly 40% in 2013.
As rough as it's been, it's the divergence with large caps which looks like the bigger story - while the small caps have fallen 10% during their correction, the S&P 500 is flat, and only in the last two weeks beginning to move in lockstep with the Russell.
For the year, the S&P 500 is up 5.4%, about 1,200 basis points ahead of the Russell, and on a year-over-year basis, the S&P's 15% gain is 1,500 basis points faster than the Russell.
Many highly regarded small-cap funds have put up "no vacancy" signs to new investors, writes Sarah Max in Barron's, their managers cautious among perky valuations or unwieldy AUM, or both. Notable closures include the $1.6B Artisan Small Cap Investor Fund, the $6.2B Fidelity Small Cap Discovery Fund, and the $993M Hotchkis & Wiley Small Cap Value Fund. T. Rowe Price has also closed two of its top performers, the $10.4B T. Rowe Price Small-Cap Fund and the $16B T. Rowe Price New Horizons Fund.
Caution may be in order given the big run for small-caps, but fund manager Bill Grierson says the current Russell 2000 (IWM +1.1%) P/E ratio is just slightly higher than its 10-year average of about 17x. Further, Q2 sales growth is at about 9% so far.
Another manager allows it's not an easy time to find cheap stocks, but beyond the sexy segments there's a whole universe of small companies, and he's been picking up some names.
Hammering away at the misconception that it pays to seek active managers in supposedly "less efficient" sectors like small caps, S&P Dow Jones' Philip Murphy finds - even choosing among the top mutual fund share classes - an alarmingly small number of managers failed to beat the benchmarks.
Starting at the March 2009 bottom and going out five years, only 9 of 139 share classes beat the S&P SmallCap 600 benchmark (that's 5.9% of the starting set).
Where alpha might be able to be delivered though, is in choosing which benchmark to track. A fund tracking the S&P SmallCap 600 (IJR, VIOO) would have outperformed one tracking the Russell 2000 (NYSEARCA:IWM) by 23% over the 5-year period.
"Knowingly overpaying never has made sense to me, which I think people are doing," says small-cap fund manager Eric Cinnamond, notable for being up 14.5% at the midway point in 2009 vs. peers' average loss of 27%, but missing out on the bull market of the last three years thanks to his large cash holdings.
The small cap stocks on his radar are as "expensive as I have ever seen them," he tells the WSJ. "We're just unwilling to overpay with other people's mooney in high-quality, small-cap stocks."