U.S. stocks have moved higher the past month and the outperformance of small-cap ETFs versus the S&P 500 shows investors are willing to take on more risk.
For the month ended July 6, the small-cap iShares Russell 2000 (NYSEArca: IWM) was up 5.9%, compared with a 3.2% gain for the S&P 500, according to Morningstar.
“The small caps have been outperforming since mid-June. Strength from this field is encouraging as they typically lead the market higher,” says Investors Intelligence technical analyst Tarquin Coe. [An Overview of Small-Cap ETFs]
“On the iShares Russell 2000 chart the 50-day exponential moving average is turning up following a test of the 200-day EMA, indicating the start of a new uptrend,” he wrote in a newsletter Monday.
iShares Russell 2000
The chart below shows the relative performance of the small-cap ETF against the S&P 500:
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