The PowerShares Zacks Micro Cap Portfolio is based on the Zacks Micro Cap Index. The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The benchmark is designed to identify a group of micro cap stocks with the greatest potential to outperform passive benchmark micro cap indexes and other actively managed U.S. micro cap strategies.
This ETF looks to give investors exposure to a basket of micro cap stocks selected using a quantitative rules-based methodology. This technique could be appropriate for those seeking more assets in the micro cap equity space, a corner of the stock market that generally has low correlations to large, medium, and small sized firms. This could make micro caps a complementary blend that can potentially boost risk adjusted performance by providing a more complete picture of the stock market’s returns. Companies in this fund generally make up less than 1% of total assets each while the average market cap of the fund is less than half a billion dollars. This could make PZI an interesting compliment to portfolios that are heavy in large and giant cap securities while also potentially boosting returns when markets are surging higher. For more information on this fund, make sure to check out PZI’s home page.
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