Introducing the Zacks Small Cap Index™

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Investing in Small Caps

Semi-Active versus Passive Strategies

Introducing the Zacks Small Cap Index™

Key Points:

Zacks Investment Research believes that a semi-active approach to indexing focused on earnings surprises will provide superior results to passive small cap strategies.
The objective of the Zacks Small Cap Index is to outperform passive small cap benchmarks using a proprietary model based on earnings surprises, analyst coverage, and liquidity.
Zacks has licensed its Small Cap Index to PowerShares Capital Management for the creation of an Exchange Traded Fund (ETF) that we believe will offer investors an improved method of generating returns in the small cap universe. The ETF begins trading under the ticker PZJ on February 16th.
Within the small cap universe, focusing on earnings surprises continues to be an effective means of generating risk adjusted returns.
Companies reporting strong positive earnings surprise tend to outperform the market for 90 days following reported earnings.

Learn more about the Zacks Small Cap Index
A Semi-Active Index Designed For Investment

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Disclosure: Copyright © 2012, Zacks Investment Research. All Rights Reserved.
The Indices presented are for comparative purposes only and an investor cannot invest directly in an Index. The Zacks Small Cap Index^sm is designed to identify companies from the universe of small cap stocks with potentially superior risk-return profiles as determined by Zacks Investment Research. The Zacks Small Cap Index^sm is an equal-dollar weighted index (subject to modification), comprised of approximately 250 stocks selected quarterly from a universe of the smallest U.S. listed companies by market capitalization. Throughout this report different dates have been used in graphs and charts. Chosen dates reflect the maximum overlapping period of data for each component of the chart. Charts produced using StyleAdvisor by Zacks Investment Research & Management. The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The Russell 2000 Index is a capitalization based, unmanaged index of the prices of 2,000 small cap stocks selected by the Frank Russell corporation. The Russell 2000 Index assumes reinvestment of dividends but does not reflect advisory fees. The Wilshire Indices presented herein are capitalization based, unmanaged indices of the prices of securities within the defined capitalization range as defined by Wilshire Associates. The Wilshire Indices assume the reinvestment of dividends but do not reflect advisory fees. An investor cannot invest directly in an index. Zacks Investment Research’s only relationship to PowerShares is Zacks’ licensing to PowerShares certain Zacks trademarks, Indices and trade names, which is composed by Zacks without regard to PowerShares, any product or any investor. The Zacks Small Cap Index^sm was created by, and is a trademark of, Zacks Investment Research and has been licensed for use by the American Stock Exchange LLC. Index Products traded on the Amex that are based on the Index are not sponsored by Zacks and Zacks does not guarantee the accuracy or completeness of the Index, or the results to be obtained by any person from the use of the Index or the trading of Index Provider Index products.