In the last full month before the US election, and amid the Covid-19 maelstrom that swept most equity markets under water, the US Russell 2000 was among the few to stay afloat. The small-cap index rose 2.1% in October, strongly outpacing losses of 2.4% for the Russell 1000 and of 2.5% for the FTSE All-World Index. Outperforming small-cap health care and bank stocks were the index’s life rafts in the storm.
This October showing capped a recent stretch of outperformance for the small-cap index: Since the September 2 market peak, the Russell 2000 has outstripped the Russell 1000 by 5.2 percentage points – although it remains down 6.8% YTD, barely denting its nearly 11-point performance gap with its large-cap counterpart’s gain of 3.8%.
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