For those of us who have believed that a rotation into the smidcap stocks is coming, the performance over the last year and through the first quarter has been disappointing; however, the return following the first quarter seems to offer a glimmer of hope. Since the end of last year and through the first quarter has been disappointing; however, the return following the first quarter seems to offer a glimmer of hope. Since the end of March, the S&P 500 has increased by 13.3% and is neck and neck with the Russell 2000, which has risen 13.5% (and is up 5.0% in July, compared to the S&P 500’s 2.5%). Meanwhile, the S&P MidCap 400 is up 10.2%, and the S&P SmallCap 600 rose 9.0%. Notably, the index that has lagged all of these is the equally weighted S&P 500, which is up 8.1%.
In this Economics Weekly, Richard de Chazal once again makes the case for why investors should shift their focus toward the long overlooked and underowned smidcap stock.