Underperforming Small-Cap ETFs Eye 200-Day Average | ETF Trends

The Russell 2000, a popular benchmark for U.S. small-cap stocks, is making a move above the 200-day moving average but has been trailing the broader market since mid-December.

The iShares Russell 2000 (NYSEArca: IWM) was in negative territory Friday after the Labor Department said nonfarm payrolls rose by 200,000 in December, more than expected. [ETF Chart of the Day: U.S. Small Cap Funds]

Bulls don’t want to see small-cap stocks lagging the S&P 500. When smaller stocks are leading the market, it means investors have a greater appetite for risk.

Small-cap stocks tend to be more volatile than blue chips but investors can be rewarded for the extra risk over longer periods.

The iShares Russell 2000 lost 4.4% last year, compared with a 2.1% advance for the S&P 500, including dividends, according to investment researcher Morningstar.