Small-capitalization stocks and related exchange traded funds have regained their mojo in recent weeks, with more investors taking a second look into this asset category.
Over the past month, the iShares Russell 2000 ETF (NYSEArca: IWM) increased 5.9%, compared to the 2.2% gain in the large-cap S&P 500 Index. Furthermore, IWM has attracted $2.7 billion in net inflows in the past month, according to XTF data.
Reflecting growing interest in U.S. small-cap equities, CME Group revealed an uptick in activity in E-mini Russell 2000 Index futures, according to a FTSE Russell note.
“We are seeing a growing level of investor interest in the US small cap market as illustrated by the activity in E-mini Russell 2000 Index futures on the CME. The Russell 2000 Index is widely viewed as the definitive measure of the US small cap equity market and is used by a wide variety of market participants, particularly through our expanding partnership with CME Group,” Ron Bundy, FTSE Russell CEO North America Benchmarks, said in a note.
Specifically, September futures contracts that expired on September 15 and the end of the roll period showed total Russell E-mini Russell 2000 Index futures volume surpassed 2.9 million contracts and open interest stood at over 518,000 contracts, or a significantly higher divergence year-over-year.
Furthermore, CME September-December E-mini Russell 2000 Index futures calendar spread traded one million times over the last three weeks, reflecting a more active outlook for small-caps ahead.
“We’ve seen very strong interest in E-mini Russell 2000 Index futures since they returned to trade at CME Group and this interest accelerated during the quarterly roll period. Our clients are clearly expressing interest in gaining exposure to the US small cap equity market by using the E-mini Russell 2000 Index futures since becoming available alongside CME’s suite of equity index futures,” Tim McCourt, CME Group managing director and global head of equity products, told FTSE Russell.
For more information on small-capitalization stocks, visit our small-cap category.