While it made an attempt to close the day in the green, the Russell 2,000 small-cap index finished down 7 basis points on Monday. This is notable because it left the index in the red on a year-to-date basis.
As shown below, the Russell 2,000 is lagging the large-cap S&P 500 badly in 2017. Through today’s close, the S&P is outperforming the Russell by roughly 8.3 percentage points YTD.
Below is a table showing the year-to-date performance of both the S&P 500 and Russell 2,000 at this point in each year since 1979 (the Russell 2,000’s inception point). For each year, we also show how the two indices performed for the remainder of the year.
At this point in the year (160 trading days), 2017 is only the third year in which the S&P 500 was up while the Russell 2,000 was down. It’s also been the third worst year ever for the Russell 2,000 on a relative basis versus the S&P 500 at this point in the year.
Interestingly, we saw a very similar underperformance scenario for the Russell 2,000 just 3 years ago in 2014. Through 160 trading days in 2014, the S&P 500 was up 7.47% compared to the Russell 2,000’s decline of 0.53%. In that year, both indices gained from August 21st through year-end, with the Russell slightly out-gaining the S&P (+4.08% vs. +3.64%).
The other year where the S&P 500 was up at this point while the Russell was down was in 1998. In that year the Russell underperformance was more than 2x as bad, though. While the S&P 500 was up 12.49% on August 20th, 1998, the Russell 2,000 was down 8.38%! In that year, the S&P 500 went on to gain another 12.61% for the remainder of the year, while the Russell only gained another 4.96%.
Below we provide chart patterns of the S&P 500 vs. Russell 2,000 in both 2014 and 1998, with the blue shading representing the first 160 trading days of each year.