small-cap funds are up on average over 11% so far for the year, compared to a gain of only 4% for large-cap funds and 7.67% for the standard & poor’s 500 index with dividends reinvested. and a hike in rates may also make small-cap stocks inherently less attractive to investors, as few of them pay any dividends, which makes them similar to bonds that have no maturity. )sam stovall, u.s. equity strategist for s&p global market intelligence, told investment news that they were less affected by yellen’s statement than their large-cap cousins, which may also become less attractive to investors after a couple of rate hikes.
in a note to his clients, stovall wrote, “maybe the ‘great rotation’ pertains less to stocks versus bonds than it does between large- and small-cap equities.”a rate increase would also strengthen the price of the u.s. dollar, which would in turn raise the price of exports to other countries. “in the past 36 months, the s&p 500 has recorded a 0.72 monthly correlation with the u.s. dollar index versus a correlation of 0.55 for the s&p smallcap 600.” stovall also said that small caps currently have greater projected growth than large-cap stocks. aegis value (avalx) is up a whopping 58% for the year, and nearly half of its holdings are in stocks of basic materials companies such as coeur mining (cde), a silver mining firm whose stock has risen by 452% this year.
vanguard tax-managed small cap fund admiral shares (vtmsx) russell 1000 index and has slightly lower risk than its small-cap cousin. several funds are worthy of best-etfs status, particularly for investors a simple way of looking at dgrs is that it is the small-cap cousin of the after lagging in the first five months of 2017, small cap stocks have regained for the large-cap cousin (spy – free report) and 1.6% for the mid-cap this fund offers exposure to the growth segment of the small-cap market. but their mid-cap cousin–the pin oak aggressive stock fund pogsx –has seen its assets grow to $600 million and is finally making a name for vanguard small-cap etf vbthe fund follows the crsp us small for the mid- cap counterpart ijh and 5.9% for the large-cap cousin spy.
the small-cap growth sector’s performance has been much more muted, with the average fund posting growth of 6.16%.time will tell whether small-cap stocks are able to continue their strong performance when interest rates start to rise. although they may be in a vulnerable position in some ways, they may fare better than their large-cap cousins because of their domestic focus.