Small-Cap Stocks Post Best Start Since 1991 as Key ETFs Gain Over 20%
Updated
Updated · CNBC · Jul 16
Small-Cap Stocks Post Best Start Since 1991 as Key ETFs Gain Over 20%
3 articles · Updated · CNBC · Jul 16
Summary
State Street says the small-cap rally still has room to run, arguing the move is being driven by fundamentals rather than a short-squeeze rebound.
More Wall Street firms are raising than cutting small-cap earnings forecasts, and State Street expects more than 20% EPS growth this quarter, including stronger third- and fourth-quarter estimates.
All 11 small-cap GICS sectors are outperforming their large-cap counterparts — a breadth signal not seen in more than 30 years — while less-shorted names are beating heavily shorted stocks.
SPSM and SLYG are both up more than 20% this year, versus a 1.9% drop and a 0.86% gain in the same period last year; the Russell 2000 is also up nearly 20%.
Avantis said investors remain too focused on large caps and should consider broader exposure, including small caps, mid-caps, developed ex-U.S. markets and emerging markets.