Many small-cap stocks are priced on the basis of their expected growth potential in the future—and not necessarily by their current economic reality. As a result, market-cap-weighted indices may not provide optimal exposure to small-cap stocks.
In weighting its portfolio by revenue rather than market capitalization, Oppenheimer Small Cap Revenue ETF removes a potential bias towards overvalued stocks. Instead, it firmly grounds its focus on companies generating real economic activity.
The Fund’s initial investment universe is the S&P SmallCap 600 Index, which comprises stocks that have undergone S&P’s rigorous selection criteria and has historically outperformed the Russell 2000 Index with less risk.
Explore more in our Small Cap Revenue ETF infographic.
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The S&P SmallCap 600 Index measures the performance of the small-cap segment of the U.S. equity market. It consists of 600 domestic stocks chosen for market size, liquidity, and industry group representation and covers approximately 3% of the domestic equities market.
The Russell 2000 Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.
Indices are unmanaged and cannot be purchased directly by investors. Past performance does not guarantee future results.
An investment in the Fund is subject to investment risk, including the possible loss of the principal amount invested. Small company stock is typically more volatile than that of larger company stock. It may take a substantial period of time to realize a gain on an investment in a small company, if any gain is realized at all. Fund returns may not match the return of its respective index, known as non-correlation risk, due to operating expenses incurred by the Fund. The alternate weighting approach employed by the Fund (i.e., using revenues as a weighting measure), while designed to enhance potential returns, may not produce the desired results. Because the Fund is rebalanced quarterly, portfolio turnover may exceed 100%. The greater the portfolio turnover, the greater the transaction costs, which could have an adverse effect on Fund performance.
These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.