The “mid” in small and midcap (SMID cap) US stocks have been a key driver this year as reflected by performance for the Russell US Indexes, a change from 2016 when US small cap stocks were clearly the key driver.
The Russell 2500™ Index, which represents the smallest 2500 US stocks of the Russell 3000® Index and therefore combines the US small cap Russell 2000® Index and a portion of the US midcap Russell Midcap® Index, has risen 5.9% in 2017 as of July 7, with the Russell 2000 Index and Russell Midcap Index rising 5% and 7.8%, respectively.
The Russell 2500 Index also had a positive return in 2016 rising 17.6% yet this return came more from the small cap arena. The Russell 2000 Index rose 21.3% in 2016 relative to a 3.8% rise for the Russell Midcap Index.
Steven G. DeSanctis – SMID Cap Strategies, Jefferies & Co., said:
“2016 was notable for smaller cap stocks, especially in the fourth quarter, with the smallest of the small and SMID caps stocks outperforming other major cap tiers. Today, breadth of market performance is lower which has led the smallest names to lag the broad market in the first half of 2017. At the same time, we have seen some significant performing stocks continuing to outperform in the first half of 2017 which impacts the larger names in the indexes.”
Martin Small, Head of U.S. iShares at BlackRock, said:
“The Russell 2500 Index has long been a staple for institutional investors, but lacked a turnkey ETF implementation. SMMD will be the first ETF based on this index to come to the fast-growing ETF market.”
Tom Goodwin, Senior Research Director, FTSE Russell Indexes, said:
“The Russell 2500 Index combines constituents from the US small cap Russell 2000 Index with the 500 smallest constituents within the Russell Midcap Index, making the index an excellent way for investors to measure the performance of the US “SMID cap” segment. The unique blend of the index has always been popular with investors as a benchmark.”
BlackRock iShares recently launched the first new exchange traded fund, or ETF, for retail investors based on the Russell 2500 Index. For more information on the index, go to the Russell US Indexes page.
 Source: FTSE Russell. Data as of July 7, 2017 and derived from the Russell Index performance calculator. Past performance is no guarantee of future results. Please see the end for important legal disclosures.
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