Performance – Ratio of Russell 2000 Index to Russell 1000 Index The underperformance of small caps relative to large caps raises questions about their capacity to adapt to rapid changes in the economic landscape. Image: Morgan Stanley Wealth Management
Relative Performance – Nasdaq 100 vs. Russell 2000 The frenzy surrounding artificial intelligence is driving U.S. tech stocks back to high levels relative to small caps. Image: BofA Global Research
S&P 500 vs. Russell 2000 – Trailing 12-Month EPS Small cap earnings tend to lead large cap earnings. Image: BofA Global Investment Strategy
Russell 2000 / S&P 500 vs. ISM Manufacturing PMI (Leading Indicator) The performance of U.S. small caps relative to the S&P 500 suggests a decline in the ISM Manufacturing PMI. Image: Morgan Stanley Research
Valuation – Russell 2000 Price-to-Book Ratio Small cap valuations remain high despite the recent sell-off. Image: Goldman Sachs Global Investment Research
Russell 2000 vs. S&P 500 – Annualized Average Monthly Return Small cap stocks tend to underperfom the S&P 500 when growth slows. Image: Goldman Sachs Global Investment Research
Russell 1000 Value Index Could this be the beginning of the rotation towards value and small caps? Image: Financial Times
Performance – Russell 1000 Value/Growth Month Returns This month sees the strongest outperformance in small cap value since the 2000s (September return projected to month end). Image: BofA Global Investment Strategy
U.S. Equities and Global Equities ex-U.S. This chart suggests that higher yields could cause great rotation from bonds to stocks, US equities to non-US equities, growth to value, large caps to small caps, tech stocks to bank stocks, credit to commodities,… Image: BofA Global Investment Strategy
2019 Market Performance Compared to 2018 Large growth, S&P 500, small growth, small caps and REITs perform best in 2019. Image: Fidelity Investments