Why The iShares Russell 2000 ETF Will Underperform
- I noted an anomaly Thursday morning, when the small-cap segment ETF, the IWM, diverged sharply from the tracks of the SPY, DIA and QQQ, and I know why.
- As investor interest and concern intensifies about the prospect of rising interest rates and Fed rate action, threat is born to the smallest of companies greatly dependent on capital.
- Recent economic data strength intensified the rate focus, and drove capital out of the small-cap heavy IWM. It's a trend that has run all year, and I expect to continue.