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Index IDEA: US small caps over the last decade

The Russell 2000® Index, measuring US small cap stocks, rose 1.8% in August and 10.2% year-to-date as of August 31. And, while past performance does not guarantee the future, in the last decade when there has been a positive return for the Russell 2000 through August there has also been a positive index return for the remainder of the year in the majority of instances.

FTSE Russell examined returns for the Russell 2000® Index over the last decade. In the last ten years, the index value has risen for the year-to-date through August six times. And, in five of those six times, the index value has increased over the rest of the calendar year. And, notably, in two other years (2010 & 2011) the index value rose in September through December following a negative year-to-date through August.

2007 is the only outlier in this trend, when the index value fell 2.9% for September through December following a 1.4% index value increase for the year-to-date through August.

Catherine Yoshimoto, Senior Index Product Manager, FTSE Russell:

“Market indexes can be effective tools for historical perspective as well as for context on current market direction. In the case of the Russell 2000 measuring US small caps, while the year-to-date market direction through August has held for the rest of the year in the majority of cases, 2007 is a notable exception. A closer look at the market environment of the late summer and autumn of that year, with credit turmoil, concerns about economic growth in the US and a weakening US dollar shifting leadership to US large cap stocks, helps provide a clue on what factors made 2007 the trend buster in our analysis.”

 

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Views expressed by Catherine Yoshimoto are as of September 1 and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group.

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No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

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Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets.

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