IJR

Among US equity factors, growth is still the leader, but the edge is thinning via numbers through Tuesday's close.Fans of small-cap investing will find encouragement in recent trading activity.If coronavirus risk remains muted in terms of reversing the recent US economic rebound, the case for small caps looks bright, or least brighter, relative to the last several years.

Stock market returns come with risk and volatility.Those risks and volatility are a tradeoff for the higher returns.What level of tradeoff you choose depends on your mindset.Would you have taken almost the same returns for half the volatility?Would you want to massively outperform in bear markets? That is what a Jedi would choose.

In a series of recent articles, I have covered the top 50 stocks in the large-cap S&P 500, the mid-cap S&P 400, and the small-cap S&P 600.Those three indices cover 1500 stocks, but there are still more than 2200 listed U.S. companies not represented in those indices.Some companies are outside of the S&P 1500 because they are small.  Some large companies have not hit the S&P index criteria, including profitability measures.Among the outsized gainers in 3Q were alternative energy firms and biotech companies as about 2% of U.S.-listed stocks doubled in value on the quarter.By looking at the tails of the return distribution, I believe that we can gain greater insight into portfolio return drivers.

In a series of recent articles, I have covered the bottom 50 stocks in the large-cap S&P 500, the mid-cap S&P 400, and the small-cap S&P 600.Those three indices cover 1500 stocks, but there are still more than 2200 listed U.S. companies not represented in those indices.Some companies are outside of the S&P 1500 because they are small. Some large companies have not hit the S&P index criteria, including profitability measures.Perhaps unsurprisingly then, the 50 worst performing stocks outside the S&P 1500 tended to be small and unprofitable.By looking at the tails of the return distribution, I believe that we can gain greater insight into portfolio return drivers.

This article depicts the worst performing group of S&P Smallcap 600 stocks during the rebound for markets in the third quarter of 2020. The S&P Smallcap 600 Index (+3.2%) lagged the S&P 500 (+8.9%) in the third quarter, and the tail of the return distribution lagged further still. Energy was the sector most over-represented on the laggards list with continued low energy prices presenting an existential threat to small cap players. By reviewing the tails of the return distribution, I believe we can glean insights that can inform future portfolio positioning.

This article depicts the worst performing group of S&P Smallcap 600 stocks during the rebound for markets in the third quarter of 2020.The S&P Smallcap 600 Index (+3.2%) lagged the S&P 500 (+8.9%) in the third quarter, and the tail of the return distribution lagged further still.Energy was the sector most over-represented on the laggards list with continued low energy prices presenting an existential threat to small cap players.By reviewing the tails of the return distribution, I believe we can glean insights that can inform future portfolio positioning.

Before Monday’s rebound in risk assets, investors rushed into the biggest long-dated Treasury ETF at a record pace.

This article depicts the best performing group of S&P Smallcap 600 stocks during the rebound for markets in the third quarter of 2020. While the S&P Smallcap 600 Index (+3.2%) lagged the S&P 500 (+8.9%) in the third quarter, the top 50 stocks in the smallcap index strongly outperformed the large cap leaders. The small cap leaders were dominated by a wide-range of consumer cyclicals as consumer spending rebounded amidst the economic re-opening. By reviewing the tails of the return distribution, I believe we can glean insights that can inform future portfolio positioning.