Small Cap Equity Positioning

Small Cap Equity Positioning With small-cap equity allocations at the 23rd percentile, there is considerable room for increased exposure—especially for investors focused on long-term growth. Image: Deutsche Bank Asset Allocation

Small Cap Stocks – Russell 2000 > 10% Gain for the Month

Small Cap Stocks – Russell 2000 > 10% Gain for the Month Bulls are smiling again! The Russell 2000’s 10.9% gain in November is a promising sign for small-cap stocks over the next six months, with an average increase of 11.3% since 1979 and gains occurring 90% of the time. Image: Carson Investment Research

Performance – U.S. Small Cap Stocks vs. Large Cap Stocks

Performance – U.S. Small Cap Stocks vs. Large Cap Stocks Small caps continue to face significant challenges relative to large caps, a trend that has persisted for several years. However, there is a growing sense of cautious optimism about their potential recovery as market conditions change. Image: BofA Global Research

U.S. Small Cap Stocks vs. U.S. Large Cap Stocks

U.S. Small Cap Stocks vs. U.S. Large Cap Stocks U.S. small caps are currently viewed as an attractive investment opportunity compared to U.S. large caps, with several factors suggesting potential outperformance over the next decade. Image: BofA Global Research

Performance – Large Cap Growth vs. Small Cap Value

Performance – Large Cap Growth vs. Small Cap Value Large-cap growth stocks are outperforming small-cap value stocks at a level not seen since the dot-com bubble era. Historical patterns and the potential for economic recovery indicate that this trend may change in the long term. Image: BofA Global Investment Strategy

Cumulative Large Cap vs Small Cap Equity Flows

Cumulative Large Cap vs Small Cap Equity Flows Since 2021, U.S. large-cap funds have seen significantly higher inflows compared to U.S. small-cap funds, highlighting a broader trend of investor preference for larger, established companies. Image: BofA Global Investment Strategy

U.S. Small Cap Fund Flows

U.S. Small Cap Fund Flows The recent surge in inflows to U.S. small-cap funds highlights a favorable outlook on small-cap stocks as an investment option, as investors appear to be reallocating some of their assets toward this market segment. Image: BofA Global Investment Strategy

Performance – Large Cap vs. Small Cap

Performance – Large Cap vs. Small Cap The durability of the rotation from U.S. large caps to U.S. small caps remains to be seen as the market assesses the implications of changing inflation and rate expectations. Image: Goldman Sachs Global Investment Research

Small Cap Stocks vs. Large Cap Stocks Relative Performance

Small Cap Stocks vs. Large Cap Stocks Relative Performance Is it time for U.S. equity investors to increase their allocation to small-cap stocks compared to large-cap stocks in their portfolio? Image: BofA US Equity & Quant Strategy