Betting that small-cap companies will be leaders in 2010, PowerShares has taken steps to launch an extensive lineup of small-cap sector ETFs.

Small-caps are more volatile and often less liquid than larger names, but this year analysts are forecasting they will be strong performers as the markets continue to recover.

The ETFs currently in registration are:

• PowerShares S&P SmallCap Consumer Discretionary Portfolio
• PowerShares S&P SmallCap Consumer Staples Portfolio
• PowerShares S&P SmallCap Energy Portfolio
• PowerShares S&P SmallCap Financials Portfolio
• PowerShares S&P SmallCap Health Care Portfolio
• PowerShares S&P SmallCap Industrials Portfolio
• PowerShares S&P SmallCap Information Technology Portfolio
• PowerShares S&P SmallCap Materials Portfolio
• PowerShares S&P SmallCap Telecommunication Services Portfolio
• PowerShares S&P SmallCap Utilities Portfolio

Each sector-specific benchmark is a subset of the S&P SmallCap 600 Index, which is a float-adjusted, market-capitalization-weighted index reflecting the U.S. small-cap market. The U.S. companies included in the portfolio have a capitalization of anywhere from $250 million to $1.2 billion, and have at least 50 percent of their stocks in the hands of public investors.

The indexes are rebalanced on an “as-needed” basis.

Investing in small-caps is not a new idea. But breaking it down by specific GICS sectors under one umbrella index is relatively new. Still, a number of ETF providers have had success offering small-cap versions of existing large-cap funds. Van Eck, to name one such example, has attracted huge assets recently to its Market Vectors Brazil Small Cap ETF (NYSEArca: BRF).

Invesco PowerShares Capital Management LLC will be the adviser for the new small-cap sector funds.

You can read the prospectus here.