In recent weeks, one of the best-performing small-cap ETFs has been the Direxion Daily Small Cap Bear 3X Shares (NYSEArca: TZA). TZA attempts to deliver triple the daily inverse performance of the Russell 2000 Index.
“Shares of smaller companies had climbed more than their larger counterparts because they were viewed as more resilient amid growing concerns about the U.S.’s trade spat with China. Small-cap companies derive the lion’s share of their revenues domestically,” reports MarketWatch.
Looking ahead, it will be hard to find additional reasons for small-caps to outperform large-caps as strong earnings and tax reforms have already been priced into the market, according to Morgan Stanley analysts.
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