It’s been a real horse race between US large- and small-cap stock index performance in 2019, with both posting strong double-digit gains year-to-date (+16.2% for the Russell 1000 Index and +17.2% for the Russell 2000 Index as of May 10). And according to our new insight, each is benefitting from its own unique macroeconomic drivers.
Alec Young, managing director, Global Markets Research, FTSE Russell:
“The more domestic, small-cap Russell 2000 Index has been shielded from seemingly endless US–China trade worries because of its relatively small 21% foreign sales footprint (vs. 32% for the large cap Russell 1000 Index.) But large-cap stocks are enjoying advantages of their own. The Russell 1000 Index has a much higher exposure to technology than its small cap counterpart, a major advantage given technology’s strong year to date outperformance relative to other sectors. In addition, the large cap index is far less exposed to financials and health care, which have both underperformed in 2019.”
Handicapping the cap tiers: Russell US Indexes sector weightings
Source for chart & quote: FTSE Russell, data as of May 1, 2019. Please see the disclaimer for important legal disclosures.
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