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The rally in recent days of the Russell 2000 Index, a widely followed benchmark of small-cap shares, has revived hope anew that this slice of the equity market is finally set to recover after a long stretch of underperformance. But
Are Reports Of Small-Cap Stocks' Revival Prospects Premature?
Summary
- The rally in recent days of the Russell 2000 Index has revived hope anew that this slice of the equity market is finally set to recover after a long stretch of underperformance.
- The iShares Small-Cap Core ETF is still trailing the broad US stock market by a wide margin for year-to-date performance.
- Expectations that the Federal Reserve will continue to lower interest rates at a time when the US economy still looks poised to expand may fuel an extended small-cap rally.
James Picerno is the director of analytics at The Milwaukee Co., a wealth manager that is the adviser to The Brinsmere Funds, a pair of global asset allocation ETFs. He also edits CapitalSpectator.com and The US Business Cycle Research Report (CapitalSpectator.com/premium-research). He is the author of three books, including "Quantitative Investment Portfolio Analytics In R: An Introduction To R For Modeling Portfolio Risk and Return." Previously he was a financial journalist at Bloomberg and before that at Dow Jones.