Compared to the massive upside delivered by tech stocks in 2023, thanks largely to the artificial intelligence (AI) frenzy, the performance of the small-cap-focused Russell 2000 Index (RUT) was modest. While the tech-heavy Invesco QQQ Trust (QQQ) has vaulted 49% higher over the past 52 weeks, shares of the RUT-based iShares Russell 2000 ETF (IWM) are up just 7.6% over the same period.
However, with small caps sporting historically low valuations at current levels, Goldman Sachs predicts a strong showing from the Russell 2000 in 2024. According to analysts at the financial institution, the index will outdo its large-cap rivals by delivering a return of about 9% over the next six months and 15% in the next 12 months.
