The US stock market continues to set new highs, but the bull market in equities comes in a variety of flavors. Yes, prices are higher across the board, but there’s a fair amount of variation to the party. The implication: the opportunity to add value with rebalancing within the equity allocation is knocking. Before we open the door, let’s take a peek at the possibilities by carving up US stocks into three buckets based on market capitalization, style (value vs. growth), and sectors. Our tour guides: a set of ETFs based on the trailing 250-trading-day total return (roughly the equivalent of 1-year performance).
Let’s start with market cap. For the moment, the smallest tier of the market is at the top of the performance ledger. Micro-cap stocks, defined by iShares Micro-Cap (IWC), is far and away in the lead with a roughly 44% gain. The biggest stocks, by contrast, are struggling to keep up: the iShares Russell Top 200 (IWL) is ahead by a comparatively light 27% over the past 250 trading days.
Turning to the prism of investment style, small-cap growth is in the lead. The iShares Russell 2000 Growth (IWO) is ahead by nearly 39% through January 15. That’s a sizable premium over the relative laggard in the group: large-cap value stocks: iShares Russell 1000 Value (IWD) is ahead by a touch less than 27%.
Slicing up the market by sectors reveals that the top performer at the moment is healthcare. The Health Care Select Sector SPDR (XLV) is up by nearly 38%, or far above the group’s bottom performer: utilities. Indeed, the 11% advance for the Utilities Select Sector SPDR (XLU) looks sluggish relative to the competition.
If you found the analysis above useful, consider the weekly updates via The ETF Asset Class Performance Review, which offers a deeper look at an ETF-based view of asset classes. For more information and a recent sample, see CapitalSpectator.com/premium.