QVMS - Small Caps Are Positioned To Benefit From Falling Rates
2024-07-30 12:15:00 ET
Summary
- While we generally group all historic rate cutting cycles together, it is a heterogeneous group of events that are often prompted by exogenous shocks, impacting financial liquidity and market returns.
- During each rate cutting cycle, the data on returns is mixed. It becomes more meaningful when overlaying the National Financial Conditions Index, which can contextualize small cap performance across different time periods.
- After the final rate cut of each cycle, the Russell 2000 generally exhibited stronger returns over both 12- and 24-month periods compared to the average returns since inception.
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Small Caps Are Positioned To Benefit From Falling Rates