Remember, I present this information to you as an average investor, so these are not professional insights, but I think they are worthy insights nonetheless. The Russell indices slice up the market in various ways. I presume that more than any other index, it can be considered broad market, though we have a tendency to focus on the S&P, Dow and Nasdaq.
Russell has the following populations that they follow not only in aggregate, but split between "growth" and "value". It is the disparity of performance among these that I found telling. I'm not quite sure what the difference is between the 3000E and the 3000 (though I'll look) or the Small Cap Completeness v. Microcap. You can go to the site and get a pdf that contains all of the names in each index. For orientation purposes, I wanted to list the indices sliced/diced:
Russell 3000® Index
Russell 3000® Growth Index
Russell 3000® Value Index
Russell 3000E™ Index
Russell 1000® Index
Russell 1000® Growth Index
Russell 1000® Value Index
Russell Top 200® Index
Russell Top 200® Growth Index
Russell Top 200® Value Index
Russell Top 50® Index
Russell Midcap® Index
Russell Midcap® Growth Index
Russell Midcap® Value Index
Russell 2000® Index
Russell 2000® Growth Index
Russell 2000® Value Index
Russell 2500™ Index
Russell 2500™ Growth Index
Russell 2500™ Value Index
Russell Small Cap Completeness® Index
Russell Small Cap Completeness® Growth Index
Russell Small Cap Completeness® Value Index
Russell Microcap® Index
Russell Microcap® Growth Index
Russell Microcap® Value Index
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I did not plot all of the indices for you, but I did want to show the relationhsip of size (large, small and all cap) and style (growth v. value). Size and syle do matter. The 8 year chart show that differencs most markedly. As always, click to make larger.
Interesting, midcap value outperforms at the 8 yr, 5 yr marks but underperforms rather markedly at the 1 yr mark.
1 comment:
Mid-cap value's out-performance makes sense, if you think about it. (And your posting made me think about it.)
Mid-cap companies have the size and heft to hold their own AND can also be (slightly) more nimble than their large cap competitors. I suspect that in the long-run these two factors -- adequate size and greater nimbleness -- can make a significant difference. The results you post seem to prove it.
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