- Small-cap outperformance earlier in the year was powered by expectations that the accelerating US vaccination rollout and easing lockdown measures would usher in a period of robust economic growth as activity normalized.
- By Q2 end, the small-cap index had relinquished nearly all of its performance edge over the large-cap index since the beginning of the year.
- The more growth-heavy sectors, such as technology and consumer discretionary, have reversed their earlier underperformance since mid-May, while traditional value sectors (most notably financials) have lost favor.
For further details see:
Fading Reflation Trade Calls Time On U.S. Small-Cap Value Leadership