Russell 2000 Forward P/E vs. Subsequent 10-Year Annualized Returns

Russell 2000 Forward P/E vs. Subsequent 10-Year Annualized Returns Should long-term investors allocate a larger portion of their portfolios to U.S. small-cap stocks, as the absolute forward P/E for the Russell 2000 indicates the potential for double-digit annualized ten-year returns? Image: BofA US Equity & Quant Strategy

Small-Caps – Trailing 12-Month Russell 2000 Return

Small-Caps – Trailing 12-Month Russell 2000 Return Goldman Sachs expects the Russell 2000 small-cap index to return 15% in the next 12 months, which suggests a positive outlook for small-cap stocks. Image: Goldman Sachs Global Investment Research

Small Cap Stocks – Relationship Between Relative Fwd P/E of Russell 2000 vs. Russell 1000 and Subsequent 10-Year Annualized Relative Returns

Small Cap Stocks – Relationship Between Relative Fwd P/E of Russell 2000 vs. Russell 1000 and Subsequent 10-Year Annualized Relative Returns Investing in small-cap stocks during periods when they are trading at a significant discount to large-cap stocks may present attractive opportunities for long-term investors. Image: BofA US Equity & Quant Strategy

Valuation – Russell 2000 Forward P/E

Valuation – Russell 2000 Forward P/E The U.S. small-cap forward P/E continues to be lower than the historical average, potentially making small-caps an attractive option for investors looking to capitalize on potentially higher returns in the future. Image: BofA US Equity & Quant Strategy

Valuation – Relative Forward P/E: Russell 2000 vs. Russell 1000

Valuation – Relative Forward P/E: Russell 2000 vs. Russell 1000 For long-term investors looking to diversify their investment portfolios, small-cap stocks can be an attractive option, as they remain relatively inexpensive compared to large-caps. Image: BofA US Equity & Quant Strategy

Performance – Russell 2000 vs. S&P 500 Seasonality

Performance – Russell 2000 vs. S&P 500 Seasonality Small caps historically tend to outperform the S&P 500 from December to February. Allocating a portion of the portfolio to small cap stocks during this time may benefit investors. Image: Goldman Sachs Global Investment Research

Russell 2000 Returns After Last Rate Hike

Russell 2000 Returns After Last Rate Hike Should equity investors favor U.S. small-cap stocks following the last Fed rate hike? Image: BofA Global Investment Strategy

Performance – Ratio of Russell 2000 Index to Nasdaq-100 Index

Performance – Ratio of Russell 2000 Index to Nasdaq-100 Index The small-cap to large-cap stock ratio has reached a record-breaking low, suggesting that small-cap stocks may be undervalued compared to their larger counterparts. Image: Morgan Stanley Wealth Management

U.S. Small-Cap Stocks – Russell 2000

U.S. Small-Cap Stocks – Russell 2000 U.S. small-cap stocks have now fallen below pre-COVID high, indicating a market sentiment shift and highlighting ongoing challenges for small-cap companies in the current economy. Image: BofA Global Investment Strategy