One aspect of the stock market this year that's gone largely unnoticed is that large-cap stocks have continued to outperform small-cap stocks. This is perhaps best shown by looking at the Russell indexes, which are divided into different groups based on market capitalization. The largest companies are contained within the Russell 1000, which has returned 3.74 percent year-to-date. Meanwhile, the Russell 2000, consisting of mid-size stocks, has returned 2.83 percent. The Russell 3000 Small-Cap Index has returned just 1.34 percent on the year.
Perhaps the biggest reason for this is that large-cap tech stocks have been performing much better than small-cap tech stocks, which have fueled the rise of small-cap indexes in recent years. Led by Microsoft at 17.5 percent, large-cap stocks had returned 15 percent as of early last week, while small-cap tech stocks had returned just 4.6 percent.
Large-cap stocks outperformed small caps last year as well. If the trend holds this year, it will be the first time since 1998 and 1999 that large caps have returned more than small caps for two years in a row.
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