February 03, 2006 at 10:18 am by Tom Lydon
Taking a look at the domestic market, small-capitalization stocks have outperformed large-caps for the past six years. Thus far in 2006, the small-cap lead continues. Small-caps tend to do better when an economy is expanding and have stronger earnings growth.
Many of the small-cap exchange traded funds hit new highs this week creating a bigger gap between the large-caps. iShares Russell 2000 Index (IWM), which represents the small-cap sector of the U.S. equity broad market, is up 7.9% for 2006, while the S&P 500 is up 1.8%.
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