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iShares Core S&P U.S. Total Market Index ETF (XUU)
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iShares U.S. Small Cap Index ETF (CAD-Hedged) (XSU)
Q: Hello Peter,
There is a possibility of rate cuts in US. Would the small cap space be good place to be? I was thinking of XSU, Russel 2000 index as opposed to XUU , the whole US market. Which one would be best in a lower rate scenario? Much appreciate it
There is a possibility of rate cuts in US. Would the small cap space be good place to be? I was thinking of XSU, Russel 2000 index as opposed to XUU , the whole US market. Which one would be best in a lower rate scenario? Much appreciate it
5i Research Answer:
es, we think small caps will benefit from a rate cut and this may be the key catalyst that the market is waiting on. With the news of decelerating CPI in the US last week signaling a higher likelihood for a rate cut, the Russell 2000 jumped significantly. XSU will be riskier with the higher volatility of being primariliy invested in small caps. We would say XSU for more upside, and XUU for a safer pick as it will perform well also.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in XSU.