ETF SOURCE INVESCO S&P SMALLCAP 600 UCITS ETF
| Issuer: Invesco |
| Asset Class: Equity |
| TER: 14bps |
| Trading Currency: USD |
| Pays Income: False |
| Listing Date: 12 Feb 2019 |
| Ticker: USML |
| ISIN: IE00BH3YZ803 |
This fund offers targeted exposure to the US small-cap equity market, a segment known for its significant long-term growth potential. Small-cap companies are often in the earlier stages of their business life cycle, making them potentially more nimble and innovative than their larger peers. This can translate into higher growth rates as they expand market share or pioneer new technologies. By investing in this asset class, investors can diversify away from portfolios that are often heavily concentrated in a few mega-cap names, gaining access to a different set of economic drivers and growth stories within the world's largest economy.
The investment vehicle tracks an index comprising 600 small-capitalization companies drawn from a broad US market benchmark. A distinguishing feature of this index is its financial viability screen, which requires prospective constituents to have a recent history of positive earnings. This quality filter helps to weed out more speculative, unprofitable businesses that can be common in the small-cap universe, aiming to provide a more stable and quality-oriented exposure. The methodology results in a diversified portfolio of established, financially sound small-cap firms operating across a wide range of economic sectors.
Incorporating a US small-cap strategy can be a valuable addition for investors with a long-term investment horizon and a moderate to high tolerance for risk. This type of allocation can act as a powerful satellite holding to a core of large-cap equities, capturing the dynamism and entrepreneurial spirit of smaller American businesses. This product provides a cost-effective and transparent way to access this market segment, allowing investors to participate in the potential upside of the next generation of leading US companies without the complexity and risk of individual stock picking.
