DGRS - Preparing For A Policy Rate Pivot With U.S. Small Caps
2024-06-18 04:05:00 ET
Summary
- The current interest rate environment is negatively impacting U.S. small-cap equities, making it challenging for them to perform well compared to large caps.
- Small-cap investors are eagerly awaiting a policy rate pivot from the Fed, as this could potentially help small caps find traction and improve their performance.
- Incorporating a high-quality framework, such as the WisdomTree U.S. SmallCap Quality Dividend Growth Fund, into small-cap allocations may help reduce volatility and potentially provide better returns in the face of rising interest rates.
By Brian Manby, CFA
As we conclude the first half of 2024, the "higher for longer" interest rate environment continues to stifle U.S. small-cap equities. While the S&P 500 relentlessly climbs higher, the Russell 2000 remains mired in a prolonged period of double-digit underperformance.
U.S. Small-Cap Performance Worsens vs. Large Caps
Past performance is not indicative of future results. You cannot invest directly in an index. (Sources: WisdomTree, FTSE, S&P, as of 6/7/24.)