Small cap leadership not just an August into September story

Small caps (IWM) have been standout leaders since the early August low, rallying 10.9%, with mid caps (MDY) next strongest at +6.3%. In comparison, major large-cap benchmarks—S&P 100 (OEF), Dow (DIA), NASDAQ 100 (QQQ), S&P 500 (SPY), and Equal Weight S&P 500 (RSP)—have gained only 4.9% to 3.7% over the same period - see the first chart.

Importantly, this strength extends beyond recent months: IWM is up 36.3% off its early April low, rivaling the 39.1% gain for QQQ and easily topping SPY’s 30.7% advance - see the second chart.

U.S. equity index returns from the August 1st low

U.S. equity index ETF returns from the April 8th low