Over the last several weeks, small-cap stocks and indexes have gained with a market rotation taking place in the second half of 2024.
A new Benzinga poll shows whether the move could gain steam or be short-lived.
What Happened: The Russell 2000 index, which is tracked by the iShares Russell 2000 ETF (NYSE:IWM) is outperforming other major stock market indexes in recent weeks.
The iShares Russell 2000 ETF is up 10.9% over the last month, outperforming the 1.7% return of the SPDR S&P 500 ETF (NYSE:SPY), the -0.9% return of the Invesco QQQ Trust (NASDAQ:QQQ) and the 5.8% return of the SPDR Dow Jones Industrial Average ETF (NYSE:DIA).
Given the recent surge in small-cap stocks, Benzinga polled readers to find out if they are adding more small caps to their portfolio.
"Are you buying more or less small-cap stocks after the historic rally?" Benzinga asked.
The results were:
- Buying more: 44%
- Buying less: 1%
- Maintaining Current Level: 34%
- Not Investing in Small Caps: 21%
Buying more small caps was the winner of the poll, beating out the option of maintaining the current level. Only 1% of readers said they were buying less. Surprisingly, 21% of readers said they are not investing in small-cap stocks currently.
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Why It's Important: The recent gains for small-cap stocks come after large-cap stocks, especially those in the technology sector.
Freedom Capital Markets Global Strategist Jay Woods told Benzinga that the Russell 2000 is still 8% off of all-time highs, despite other market indexes hitting all-time highs.
Woods suggested that the 8% gain for the Russell 2000 is an "easy upside target."
Here's a look at the current one-year and year-to-date return of the ETFs that track the major stock market indexes:
- IWM: 1-Year: +14.8%, YTD: +10.7%
- SPY: 1-Year: +23.5%, YTD: +17.2%
- QQQ: 1-Year: +25.6%, YTD: +17.3%
- DIA: 1-year: +19.1%, YTD: +9.3%
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The study was conducted by Benzinga in July 2024 and included the responses of a diverse population of adults 18 or older. Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from 85 adults.
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