“Nevertheless, the index has tended to outperform three and six months after a monthly gain of 6% or more,” according to Schaeffer’s. “Specifically, three months out, the RUT was up another 4.67%, on average. Six months out, the index was higher by 8.87%, on average. Plus, the RUT was in the black 85% of the time in both instances. For comparison, the small-cap index averages three- and six-month gains of just 3.08% and 6.19%, respectively, looking at anytime data since 2010.”
The $45.66 billion IWM allocates over 35% of its combined weight to financial services and technology stocks.
For more information on small-capitalization stocks, visit our small-cap category.
Tom Lydon’s clients own shares of IWM.