Can the small-cap stocks in the US market that have underperformed for four years turn the tide in 2025?
Since 2020, U.S. small-cap stocks represented by the Russell 2000 have performed poorly, with an increase of only 43.2%, far below the MSCI World Index's 59.09%, the S&P 500's 83.52%, and the NASDAQ's 111.57%. Small-cap stocks have underperformed the S&P 500 Index by 40 percentage points over four years and nearly 70 percentage points compared to the NASDAQ. The market had expectations for small-cap stocks after Trump's election, leading to a strong rebound in the Russell 2000 Index in November
Since 2020, the small-cap U.S. stocks represented by the Russell 2000 have continued to underperform the market. According to the data, the growth rates from 2020 to the present are as follows:
Small-cap Russell 2000: up 43.2%.
MSCI World: up 59.09%.
S&P 500: up 83.52%.
NASDAQ: up 111.57%.
Over four years, small-cap U.S. stocks have underperformed the S&P 500 index by 40 percentage points and have lagged behind the NASDAQ by nearly 70 percentage points.
With the election of Trump, the market expected a rally in small-cap U.S. stocks. Therefore, after Trump's election as President of the United States in November, small-cap U.S. stocks experienced a surge, with the Russell 2000 index seeing a strong rise in November.
