The Russell 2000 Index (RUT), a widely followed benchmark of small-cap firms, typically exhibits higher volatility than its larger-cap peers, appealing more to risk-tolerant investors. But while small-caps have led the charge in past bull markets, the RUT has been sluggish so far amid the artificial intelligence (AI) revolution. The S&P 500 Index ($SPX) has gained 24% in the past 52 weeks, compared to RUT's 15.7% increase. In 2024, while the SPX has maintained its upward trajectory with a 6.9% gain, RUT is down more than 1%%.
However, not all small-caps are underperforming. Maybe that’s why, after initially forecasting a 9% gain for the group during the first six months of 2024, Goldman Sachs (GS) is now urging investors to be “selective” on small caps.
