Small Caps Set To 'Lead Their Large Cap Brothers' For Rest Of 2024, Says Market Strategist

Author: Surbhi Jain | August 23, 2024 03:44pm

While the titans of tech may dominate headlines, a quieter revolution is brewing among small-cap stocks.

According to Ryan Detrick, chief market strategist at Carson Group LLC, small caps are not only staging a remarkable rally but could soon surpass their larger rivals.

Detrick has thrown a spotlight on this trend with his recent tweet, noting that “The past 12 months small caps are up 18%.”

“Yes, they aren’t up as much as large cap tech, but we continue to expect them to do quite well the rest of ’24 and likely lead their lg cap brothers,” he said in a post.

The past 6 months small caps are up 9%.

The past 12 months small caps are up 18%.

The past 5 yrs small caps are up 50%.

Yes, they aren't up as much as large cap tech, but we continue to expect them to do quite well the rest of '24 and likely lead their lg cap brothers.

— Ryan Detrick, CMT (@RyanDetrick) August 23, 2024

Small Cap ETFs Showing Strength

Here's how the small-cap ETFs are faring, underscoring the bullish sentiment:

• iShares Core S&P Small-Cap ETF (NYSE:IJR): Up 8% YTD, this ETF has delivered a 9.2% gain over the past six months and a solid 17% over the past year. Its five-year return stands at an impressive 57%.
• iShares Russell 2000 ETF (NYSE:IWM): This ETF boasts a 10.3% YTD increase and a 18.5% rise over the past year, with a five-year gain of 51%.
• Vanguard Small Cap ETF (NYSE:VB): With an 10% YTD performance, VB has risen 18.3% in the past year and 56.6% over five years.

These strong performances highlight the potential in the small-cap sector. For those looking to explore further opportunities and navigate a volatile market, the Benzinga SmallCAP Conference on Oct. 9-10 in Chicago offers a chance to gain valuable insights and connect with industry leaders.

Read Also: International Small-Cap ETF Reaches 52-Week High, Leaving Investors Wondering What’s Next

What This Means for Investors?

Despite the dominance of large-cap tech stocks, small caps are carving out their own success story. Detrick's insight hints at an exciting year ahead for these nimble players, suggesting they could outpace their larger counterparts.

For investors, the potential leadership of small caps in 2024 could present a significant opportunity. As Detrick suggests, small-cap stocks are not only catching up, but could outpace their larger counterparts in the near future. This shift could translate into substantial gains for those who pivot to small-cap investments now.

ETFs like IJR, IWM, and VB offer diversified exposure to this segment, reflecting their strong recent performance and potential for continued growth.

Investors looking to capitalize on this trend might consider increasing their allocation to small-cap funds or individual small-cap stocks, balancing their portfolios with these high-growth opportunities.

As we move into the latter half of 2024, small-cap stocks may have the potential to outperform, highlighting that market size isn’t always the key factor in investing.

Read Next:

• Small Caps Soar: 3 Russell 2000 Stocks Doubling Investor Wealth In 2024

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Image created using artificial intelligence via Midjourney.

Posted In: IJR IWM VB