For investors seeking momentum, PowerShares S&P SmallCap Financials Portfolio ( PSCF ) is probably on their radar now. The fund just hit a 52-week high, and is up roughly 16.4% from its 52-week low price of $36.70/share.
But are more gains in store for this ETF? Let's take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
PSCF in Focus
PSCF focuses on the financial segment of the U.S. market, holding 122 stocks in its basket. It is a small cap centric fund with key holdings in banks, REITs and insurance segments. The fund charges investors 37 basis points a year in fees and has top holdings in Private Bancorp, EPR Properties and ProAssurance (see: all the Financial ETFs here ).
Why the Move?
The financial sector has been an area to watch lately as the Fed is preparing to raise interest rates in its December meeting given an improving economy backed by the solid job market and decent inflation data. The financial sector seems to be a good bet, as it will be a major beneficiary of a rising interest rates' environment. This is because the steepening yield curve would bolster profits for banks, insurance companies, discount brokerage firms and asset managers.
More Gains Ahead?
Currently, PSCF has a Zacks ETF Rank of 3 or 'Hold' rating with a Medium risk outlook, so it is hard to get a handle on its future returns in one way or another. However, many of the segments that make up this ETF have strong a Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.