Wednesday, June 3, 2020

Rise of the Small Caps

One of the big success stories of the market's comeback has been small-cap stocks. Following a yearslong bear market for small-capsthe Russell 2000 index, which tracks the performance of small-cap stocks, rose 20.9 percent during April and May.

That stretch marked the index's largest two-month percentage gain since 2009. Moreover, it is the best two-month relative performance to the S&P 500 index since February of last year, according to Dow Jones Market Data.

But keep in mind, one factor working in the favor of small-caps' rise is their dramatic underperformance over the past two years. While the S&P 500 consistently reached new heights throughout 2019 and in the first six weeks of 2020, the Russell 2000 still hasn’t regained the record high it set back in August of 2018.

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