5 ETFs Leading the Small-Cap Rally
- Small-Cap Stocks Rally: Small-cap stocks, represented by the Russell 2000 Index, surged in May with a 7.1% gain, outperforming the S&P 500.
- ETFs Leading the Rally: Highlighted ETFs that performed well include PSCU, XJR, ISMD, XSMO, and IJR, all with a Zacks ETF Rank #3 (Hold).
- Small-Cap Stocks vs. Large-Cap Stocks: Small-cap stocks are cheaper than large-cap stocks, making them an attractive investment option.
- Factors Driving Small-Cap Rally: Renewed rate cut bets, optimism among small-business owners, and potential growth opportunities in AI are driving the small-cap stock rally.
- ETF Profiles: Detailed profiles of the highlighted ETFs, including their performance, holdings, and fees.
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Analyst Views on ISMD

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ETF Analysis: The Inspire Small/Mid Cap ETF (ISMD) has an implied analyst target price of $43.33 per unit, indicating a potential upside of 16.78% from its current trading price of $37.10.
Stock Performance Insights: Notable underlying holdings such as Repay Holdings Corp, PubMatic Inc, and Ameresco Inc show significant upside potential based on analyst targets, raising questions about the validity and optimism of these projections.

Investor Activity Increase: Despite the market turbulence caused by President Trump's tariffs, conservative investors are becoming more active, as indicated by a rise in account sign-ups on the Monorail investing app.
Monorail Insights: Monorail's CEO noted that this trend of increased investor engagement has been observed over the past few months.
Overview of Inspire Small/Mid Cap ETF (ISMD): Launched in 2017, ISMD is a smart beta ETF that aims to match the performance of the Inspire Small/Mid Cap Impact Equal Weight Index, focusing on 500 inspiring small and mid-cap U.S. companies, with an expense ratio of 0.59% and a current dividend yield of 1.28%.
Performance and Comparison: The ETF has shown a 7.93% increase recently and a 25.50% rise over the past year, while also being compared to other ETFs like iShares ESG Aware MSCI USA ETF and JPMorgan Nasdaq Equity Premium Income ETF, which offer lower expense ratios and potentially lower risk options for investors.
Inspire Small/Mid Cap ETF Overview: Launched in 2017, the Inspire Small/Mid Cap ETF (ISMD) is a smart beta fund that aims to provide broad exposure to small and mid-cap companies in the U.S., with an emphasis on non-cap weighted strategies and a focus on risk-return performance.
Performance and Alternatives: The ETF has shown positive performance, with a 12.37% increase over the past year, while also offering competitive expense ratios compared to other ETFs in the same category, such as iShares ESG Aware MSCI USA ETF and JPMorgan Nasdaq Equity Premium Income ETF.







