Two Ways for Canadians to Access U.S. Small Caps with Global X’s New ETFs
Global X launched in November the RSSX and RSCC ETFs, offering U.S. small-cap growth opportunities with diversification and income-focused strategies.
Global X Investments Canada Inc. has expanded its ETF lineup with the launch of the Global X Russell 2000 Index ETF (RSSX) and the Global X Russell 2000 Covered Call ETF (RSCC). These funds provide Canadian investors with targeted exposure to the U.S. small-cap equity market, a vital segment often considered the growth engine of the American economy. With these offerings, Global X aims to address investors' dual priorities of portfolio diversification and income generation, delivering solutions tailored to long-term financial goals.
How Do These Global X ETFs Work
The RSSX ETF seeks to replicate the performance of the Russell 2000 RIC Capped Index, offering exposure to 2,000 small-cap U.S. equities spread across diverse sectors.
This broad reach enables investors to tap into the growth potential of smaller, innovative companies. In contrast, RSCC combines the same small-cap exposure with a dynamic covered call strategy.
This overlay aims to generate additional income through call option premiums, while simultaneously reducing downside risk during market turbulence. Both ETFs offer currency flexibility, with options to invest in CAD- or USD-denominated versions.
Why Investors Should Consider These ETFs
Investors prioritizing capital growth and portfolio diversification may find RSSX appealing. By tracking the Russell 2000 Index, RSSX provides exposure to a broad range of small-cap U.S. companies, often representing emerging growth sectors and opportunities overlooked by larger indices.
In contrast, RSCC is designed for income-oriented investors seeking a balance of income and capital appreciation. This ETF generates consistent monthly income through option premium income from a covered call strategy. By selling call options on a portion of its holdings, RSCC can generate regular income, but it also limits the upside potential of the underlying investments. This strategy can reduce portfolio volatility while providing a steady income stream.
Chris McHaney, Executive Vice President of Investment Management & Strategy at Global X, emphasizes their value: “Small-capitalization companies, like those within the Russell 2000 index, underpin the U.S. economy, represent real sector diversity, and can be a more efficient way to capitalize on news-driven opportunities in markets. With the covered call overlay in RSCC, investors can also achieve additional income with the benefit of downside mitigation.”
About the Issuer
Global X Investments Canada Inc. is a leader in the ETF space, managing over $35 billion in assets across 134 funds listed on Canadian stock exchanges.
As part of the Mirae Asset Financial Group, which oversees $800 billion globally across 19 countries, Global X leverages extensive resources and expertise to create innovative financial solutions. With the introduction of RSSX and RSCC, the firm continues its tradition of offering high-quality, investor-focused products designed to meet the evolving needs of the Canadian market.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
