US small-cap stocks have continued to outpace their large-cap counterparts, with the Russell 2000® Index up nearly 10% in the month of February relative to a 6.5% rise for the US large-cap Russell 1000® Index. This same performance trend holds true for YTD and one-year comparisons between the two indexes.
Interestingly, this surge in US small-cap market performance has been accompanied by an increase in relative volatility. The daily closing price of the Cboe Russell 2000 Volatility IndexSM, or RVX, which measures 30-day expected volatility for the US small-cap market, has averaged just over 32 since the beginning of 2020, a full 12 points higher than its five year average of 21.4.
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