Bear markets are generally bad news for small-cap stocks, and there is now only one exchange-traded fund focused on smaller companies that has turned positive for the year. Invesco S&P Smallcap Energy ETF (PSCE) is the only small-cap fund that’s up in 2022, Todd Sohn, technical and ETF strategist at StrateGas, said in a note on Tuesday. “Based on 6-month price return, this is the worst reading since the nadir of the financial crisis, where none of the 39 listed small-cap ETFs posted positive returns in the last 6 months,” Sohan said. wrote. Given the strength of energy stocks in 2022, the Invesco Fund’s outperformance, which is up nearly 37% year over year, probably comes as no surprise. The fund’s performance is close to that of its larger counterparts in the SPDR S&P Oil End. Gas Exploration and Production ETF (XOP) and Energy Select Sector SPDR Fund (XLE). The success of Invesco Fund has not piqued investor interest. The fund, which has a management fee of 0.29%, had only $155 million in assets under management as of Friday, according to Invesco. “We are surprised that the fund has only seen an inflow YTD of $11 million and this reflects an overall hostility towards energy. While under pressure last week, the sector still ranked first in the performance of a broad amount, yet the sector 5th in flow (behind even utilities),” Sohan wrote. Put another way, funds like ARKK, ESGU, 3x Leveraged QQQ, and Treasury Bonds (TLT) have drawn more inflows this year than XLE, he added.
