Small-capitalization stocks have been leading the market's rally this year: While the S&P 500 index, which is made up of large-cap stocks, has risen by 15 percent in 2013, the Russell 2000 index, which is made up of small-cap stocks, is up 21 percent. Small-cap stocks are typically defined is those with less than $2 billion in market capitalization.
But the stocks in the Russell index have grown so much that they've distorted what it means to be a small-cap stock. According to research from the trading firm Miller Tabak, there are now 35 stocks in the Russell 2000 that have blown past the traditional $2 billion limit and are now valued at anywhere between $3 billion and $4 billion.
And it's those larger stocks that have really driven the index's performance. The smallest group of small-cap stocks, those with market capitalizations below $200 million, actually lost 34 percent so far this year. But the ones that are growing themselves out of the index, stocks in the $3 billion to $4 billion range, have risen by a whopping 234 percent.
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