Prior to Labor Day we noted the tendency of small-cap stocks to outperform large-cap stocks beginning at the end of August and lasting until around mid-September.
This small-cap advantage typically begins on or around the 18th trading day in August and lasts until around the 12th trading day in September. On average the Russell 2000(NYSEARCA:IWM) has outperformed the Russell 1000 by 0.7% during this time span with the Russell 2000 outperforming 70% of the time over the last 40 years. As of today’s close Russell 2000 is up 4.5% since the close of August 26 while Russell 1000 is up 3.3%. As a reminder, small-cap outperformance in September usually does not last much beyond the 12th trading day (September 18th, this year).