Momentum, Large-Cap Growth Factors Continue to Dominate US Returns in 2024 | Investing.com
In the race for performance in the 2024 calendar year standings there is a clear frontrunner; momentum and large cap growth factors are consistently outshining their competitors by a significant margin as indicated by a selection of ETF data up until Tuesdays market close, on October 29th.
The iShares MSCI USA Momentum Factor ETF (NYSE;TUMTUM) and the iShares S&P 500 Growth ETF (NYSE;I V W) are neck and neck for the lead this year, with gains of 32% and 31%, respectively. Outpacing the overall market increase of 23% according the SPDR S&P 500 ETF (NYSE;S P Y).
It's worth noting that the primary risk factors affecting the US stock market are showing progress this year; however the outcomes differ significantly across the board. On the end of the spectrum is a modest 5 percent growth rate, for small cap value stocks (represented by IJS). Enough all three categories of small cap stocks (growth, core and value) are currently trailing behind in the 2024 performance analysis.
Lately theres been a lot of hope that small cap stocks might be making a comeback in performance compared to their counterparts after lagging behind for some time now. This month I raised the question. "Is it too early to say if small cap stocks are, on the rise again?"
It appears that after two weeks have passed since then; the indications point towards an answer based on recent market activities observed in the current scenario of the market landscape.The primary small cap ETF (IJRandSPDR S&P500 ETF Trust) for instance has been lagging behind the market performance (SPDR S&P500 ETF Trust,) over the past 1 month and 3 month periods.
Cliff Asness from AQR Capital Management reiterated his enduring belief that the size premium (also known as the small cap effect) has lost its relevance.In a post on platform X and referencing numerous research papers from his firm, about this subject matter his stance was clear.
"It's no longer relevant because it was never truly relevant in terms of market performance than quality. Many struggle to accept the absence of a size impact in comparison, to market trends despite it being scientifically proven."
It appears that the market concurs with this years lackluster performance, in small cap stocks.
Shandor Brenner is an American journalist recognized for his sharp and insightful reporting on social and political issues. His work is known for its depth, integrity, and the ability to highlight critical societal concerns.
