Skip to content
Aug 06 2018

Small Cap vs Mid Cap vs Large Cap

  • Aug 6, 2018

Join Advisors


James Paulsen, Ph.D. / Chief Investment Strategist

Jim Paulsen

Read Jim Paulsen's renouned weekly market newsletter, Paulsen's Perspective.

Fund/ETF Notes

Updates from our CIO Doug Ramsey and the Portfolio Management Team

Research

Ideas for advisors to make asset allocation, sector or factor tilts based on our research.

Free Trial

Take a test drive before making a commitment. Trial includes full access to our Advisors site.

Sign up today

Small Cap Premium Spikes To 12%

Using non-normalized trailing operating earnings, Small Caps are selling at a 12% valuation premium to Large Caps (chart). Finally, our Ratio of Ratios has broken out of its range. The recent run up in Small Cap stocks, coupled with a less rosy (though still fantastic) trailing earnings profile, has given us the largest Small Cap premium we’ve seen in three years. However, looking at full-year 2018 earnings (table), Small Caps hold only a modest 5% valuation premium.

The S&P 500 outperformed in July—bunching YTD returns among the various market cap indexes closer together. Since 2015, returns are very uniform: S&P 500 +47%, S&P 400 +44%, Russell 2000 +46%.

Login

For full access, please enter your credentials.
Remember Me

About The Author

Phil Segner / Research Analyst

Interested in Investing in a Model?

Contact us if you are interested in investing in our ETF models.