COTW: Small Cap Stocks Playing Catch-up

COTW: Small Cap Stocks Playing Catch-up

While small cap stocks (as measured by the Russell 2000 Index) have lagged large cap stocks (as measured by the S&P 500 Index) year to date, the gap narrowed in November after small cap outperformed large cap by 9.3% (as of November 29).  This is the largest one-month performance spread between small cap and large cap since February of 2000.

While the growth of 100 chart below (LHS) shows the Russell 2000 Index catching up to the S&P 500 Index for the year to date, the ratio chart (RHS) shows that this relative outperformance began on April 3 after U.S. equity markets rallied from the lows of the bear market.

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