The Case for Small Caps - 12/14/2023
It's a growth vs. value story
One great recipe for underperforming in 2023 has been to invest in the small caps. Despite an 18% rally from their October lows, the small caps are up less than 10% for the year. The S&P 500 index, meanwhile, has risen nearly 25%, and the NASDAQ Composite is up more than 40%.
It’s an interesting shift from last year. The small caps were the first to bottom in 2022, setting their lows in the early part of the summer, whereas the large cap indexes kept dropping until the fall. But while the large caps have rallied in 2023 and are approaching new all-time highs, the Russell 2000 small caps remain rangebound closer to their lows.