Traditionally, small-cap stocks have a market capitalisation ranging from a few hundred million to $2 billion.

The upside can be greater for these companies that still are largely unproven or are perhaps yet to generate profit.

But they also tend to be more volatile than larger-cap stocks.

The dust settles after earnings season

The report from VanEck shows the market reaction to earnings season was more intense than in years gone by. 

According to the ETF provider, most companies (62%) reported in-line results, with 22% delivering beats and slightly outpacing misses (16%).

However, VanEck suggests market reactions did not reflect this 'solid' result. 

One in five reporting companies moved more than 10% after they announced their results. 

Analysing the results on a market-weighted basis, mid-cap companies, as represented by the S&P/ASX MidCap 50 Index, led earnings beats this season, with a net-beat rate of 2.9% versus the S&P/ASX 200 Index's 1.15%.

Small caps battered but not beaten

VanEck also said that small caps, as represented by the companies in the S&P/ASX Small Ordinaries Index (ASX: XSO), performed the worst from an earnings per share (EPS) surprise perspective.

What is interesting is that after the earnings season, an analysis of the consensus 12-month price targets shows that small caps sit highest.

The outlook for small companies is brighter. The RBA is starting to cut rates, lowering capital costs. The economic outlook has led to small companies having the highest price-target revisions, signalling the market's conviction in Australian small caps.

VanEck said that historically, during this type of cycle, small caps have offered more upside than large caps because they have fallen further or not kept pace with large caps as GDP growth slowed. 

Importantly, the provider did also reinforce that the Small Ords has delivered lower cumulative returns relative to the broader, large-cap dominated S&P/ASX 200 Index (ASX: XJO) over the long term.

This reflects the volatility that may come with this investment class compared to blue-chip stocks.

How do investors gain exposure?

Based on the research from VanEck, investors who have been eyeing specific small caps may be well-positioned to buy the dip, with economic tailwinds potentially coming in the short term. 

Alternatively, there are ASX ETFs that offer more diversified exposure to the small-cap sector. 

For example, the VanEck Vectors Small Companies Masters ETF (ASX: MVS). 

It tracks an index consisting of 60 small-cap ASX-listed companies domiciled in Australia or New Zealand with strong growth characteristics and sound fundamental indicators of quality.

It has a very evenly distributed portfolio, with its largest exposure representing just 2.7% of the fund. 

The fund has risen more than 17% YTD. 

Other ASX ETFs tracking small-caps include: 

• SPDR S&P/ASX Small Ordinaries Fund (ASX: SSO) – Tracks the returns of the Small Ordinaries Index, which are companies included in the S&P/ASX 300 Index (ASX: XKO), but not in the S&P/ASX 100 Index (ASX: XTO).
• iShares S&P/ASX Small Ordinaries ETF (ASX: ISO) – Also measures the performance of small-capitalisation Australian equities included in the ASX 300 Index, but not in the ASX 100 Index.
• Vanguard MSCI Australian Small Companies Index ETF (ASX: VSO). 

The post Why now is a good time to turn to small-cap ASX ETFs appeared first on The Motley Fool Australia.

Except for the SPDR S&P 500 ETF Trust (ASX: SPY), the ex-dividend date for the distributions listed below is today.

The payment date is 11 July.

Here are the details.

How much will SPDR ASX ETF investors get?

The SPDR S&P/ASX 200 ETF (ASX: STW) will pay 66.6712 cents in cash per unit. The ETF will also pay 13.5988 cents worth of franking credits and 0.2108 cents worth of foreign tax credits.

The SPDR S&P/ASX iBoxx Australian Government Bond ETF (ASX: GOVT) will pay 18.0410 cents in cash per unit.

The SPDR S&P/ASX 200 ESG ETF (ASX: E200) will pay 107.1402 cents in cash per unit, plus 5.0135 cents worth of franking credits and 0.0323 cents worth of foreign tax credits.

The SPDR S&P/ASX 50 ETF (ASX: SFY) will pay 64.0319 cents in cash per unit plus 13.2627 cents worth of franking credits.

The SPDR MSCI Australia Select High Dividend Yield ETF (ASX: SYI) will pay 264.7328 cents in cash per unit. The ETF will also pay 7.8319 cents worth of franking credits and 0.0002 cents worth of foreign tax credits.

The SPDR S&P/ASX Small Ordinaries ETF (ASX: SSO) will pay 21.5897 cents in cash per unit, plus 6.9222 cents worth of franking credits and 0.1865 cents worth of foreign tax credits.

The SPDR S&P/ASX 200 Resources ETF (ASX: OZR) will pay 20.6316 cents in cash per unit, plus 8.0525 cents worth of franking credits and 0.03770 cents worth of foreign tax credits.

But wait, there's more!

The SPDR S&P/ASX 200 Listed Property ETF (ASX: SLF) will pay 31.5595 cents in cash per unit. The ETF will also pay 0.0144 cents worth of franking credits and 0.0475 cents worth of foreign tax credits.

The SPDR MSCI World Quality Mix ETF (ASX: QMIX) will pay 109.9871 cents in cash per unit, plus 0.5967 cents worth of franking credits and 6.4629 cents worth of foreign tax credits.

The SPDR S&P Global Dividend ETF (AUS) (ASX: WDIV) will pay 125.7777 cents in cash per unit, plus 0.0365 cents worth of franking credits and 9.1763 cents worth of foreign tax credits.

The SPDR S&P World ex Australia Carbon Aware ETF (ASX: WXOZ) will pay 345.1500 cents in cash per unit. The ETF will also pay 11.4313 cents worth of foreign tax credits.

The SPDR S&P/ASX 200 Financials Ex-A-REIT Fund ETF (ASX: OZF) will pay 70.5192 cents in cash per unit plus 11.4581 cents worth of franking credits.

The SPDR S&P 500 ETF Trust (ASX: SPY) will pay US 1.761117 cents in cash per unit. The ex-dividend date was 20 June. The expected pay date for ASX investors is 14 August. State Street will announce the foreign exchange rate for the conversion into Australian currency in due course.

The post Own SPDR ASX ETFs? Here is your next dividend and when you'll receive it appeared first on The Motley Fool Australia.

What I have noticed is that after underperforming the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the past five years, the S&P/ASX Small Ordinaries (Index: ^AXSO) (ASX: XSO) has been making a comeback over the past six months.

That suggests that while the companies that dominate the ASX are struggling for growth, smaller companies are outperforming – and that suggests it is there where investors should be looking for companies that can beat the market.

The Small Ordinaries index represents the small cap members of the S&P/ASX 300 index but excludes those that are in the ASX 100.

If investors don't want to pick the shares themselves, they can always invest in exchange traded funds that track the performance of the index, including the iShares Small Ordinaries Index Fund (ASX: ISO) or the SPDR S&P/ASX Small Ordinaries Fund (ASX: SSO).

However, the Small Ords also includes what I would call non-investment grade companies, including a number of miners and energy companies. With their outlook dependent on commodity prices, investors may want to consider 'stock picking' and selecting from a number of quality industrial companies.

These companies include the following eleven…

Source: Google Finance

As you can see, these aren't what many would consider as 'small' companies, but they could all definitely grow up to be much bigger. That's one of the advantages these companies have over their larger counterparts – in many cases, they have more opportunities for growth.

While a number of the companies in the table above may appear nose-bleeding expensive on a P/E ratio basis, it's important to remember that if the companies are growing strongly, those P/E ratios can come down very quickly indeed.

Foolish takeaway

There's one other bonus for investors investing in smaller companies and that's the fact that they are generally under-researched and out of the mainstream media spotlight. That means more chance that the market will misprice the shares – an advantage for Foolish investors to make the most of.

The post Why investors need to consider these 11 smaller companies now appeared first on The Motley Fool Australia.