Friday, November 13, 2020

Chart of the Day - Do Small Caps Out Perform Large Caps?


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Barchart.com's Chart of the Day - Do Small Caps Out Perform Large Caps?
November 13, 2020: Published by Barchart.com

Today's Barchart Chart of the Day is a little different.  Instead of finding a stock with the best upward price appreciation, I thought it might be time to revisit the old saying that "In the long run Small Caps outperform Large Caps".  When I began investing almost almost every broker would pull out a charts prepared by Ibbotson that showed that since the Great Depression Small Caps always out performed Large Caps and every broker repeated that like it was proven fact.

I decided to see if that dogma was still true.  I decided to compare the returns of the S&P 500 Large Cap ETF (NYSEARCA:IVV), the S&P 400 Mid Cap ETF (NYSEARCA:IJH), the S&P 600 Small Cap ETF (NYSEARCA:IJR) and the Micro Cap ETF (NYSEARCA:IWC) from the most recent Market bottom at 3/23 till today and the dogma still seems to hold true.

IVV IJH IJR IWC

As you can see over that period the IVV returned 60.22% while the IJH returned 73.29%, the IJR 66.89% and the IWC returned 75.45%.

Additional information:

S&P 500 ETF (IVV)

  • 100% technical buy signals
  • 3 new highs and up 2.10% in the last month
  • 19.90+ Weighted Alpha
  • 15.42% gain in the last year

S&P Mid Cap 400 ETF (IJH)

  • 100% technical buy signals
  • 7 new highs and up 6.11% in the last month
  • 14.70+ Weighted Alpha
  • 6.11% gain in the last year

S&P 600 Small Cap ETF (IJR)

  • 100% technical buy signals
  • 8 new highs and up 8.07% in the last month
  • 11.60+ Weighted Alpha
  • 1.48% gain in the last year

Micro Cap ETF (IWC)

  • 100% technical buy signals
  • 4 new highs and up 4.74% in the last month
  • 21.90+ Weighted Alpha
  • 12.80% gain in the last year
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