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The quickest way to see investors don't believe a nasty trade war that pummels the U.S. economy will actually happen: small-cap stocks are finally out-performing. 

After lagging behind U.S. large-cap stocks for the last one and three-year periods ended Mar. 13, U.S. small-cap stocks as measured by the Russell 2000 Index have performed in line with U.S. large-cap stocks in the Russell 1000 year to date. The Russell 2000 has pulled ahead of the Russell 1000 during the past month and in March, points out FTSE Russell -- the Russell 2000 has risen 5.2% in March vs. 2.2% for the Russell 1000. 

"Several fundamental factors are driving recent small cap alpha -- first, the Russell 2000 Index constituents have a much lower 19% international revenue exposure than the Russell 1000 Index's 38% and as a result, it has been less affected by recent trade war fears," says FTSE Russell managing director Alec Young. 

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"In addition, while small caps generally sport higher valuations than large cap stocks, it's worth remembering that they have a faster growth outlook."

Some small-cap names in particular have crushed the Russell 2000's year to date performance:

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