The S&P 500 Index, as we’ve noted many times, has been having a terrific 2013, increasing in value by 24% so far this year. But that’s not been the most impressive asset class in the stock market. The S&P 500 consists solely of large-cap companies, but small-cap companies – as measured by the Russell 2000 index – are up a blazing 30 percent this year.
Investors have responded to those kinds of numbers. They’ve poured $22 billion into small-cap mutual funds and ETFs this year. That’s on pace to set a record for inflows into small-cap funds for a single year.
But they’ve started to slow down. The Russell 2000 is down about 2 percent in the month of November so far. That’s while the larger-cap stocks have continued to make gains; since October 1st, the S&P 500 is up 4.5 percent, but the Russell 2000 is up just 1.3%.
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