EXCLUSIVE: Magnificent 7 Underperformance, 'Soft Landing' Could Trigger A Rotation Into Small-Cap Stocks, Says Russell Investments' Eitelman
Portfolio Pulse from Surbhi Jain
Paul Eitelman from Russell Investments suggests that underperformance of the 'Magnificent 7' tech giants and a 'soft landing' for the U.S. economy could trigger a rotation into small-cap stocks. This shift could benefit ETFs like iShares Russell 2000 ETF (IWM), Vanguard Russell 2000 ETF (VTWO), and Avantis US Small Cap Equity ETF (AVSC).
September 10, 2024 | 6:47 pm
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POSITIVE IMPACT
Avantis US Small Cap Equity ETF (AVSC) could see positive impacts if small-cap stocks become more attractive due to macroeconomic shifts.
AVSC focuses on small-cap equities. If the market rotates towards small-caps due to the outlined catalysts, AVSC could experience increased investor interest.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The iShares Russell 2000 ETF (IWM) could benefit from a rotation into small-cap stocks if the 'Magnificent 7' underperform and the U.S. economy achieves a 'soft landing'.
IWM tracks the Russell 2000 Index, which represents small-cap stocks. If the 'Magnificent 7' underperform and the economy achieves a 'soft landing', small-caps could gain investor interest, benefiting IWM.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Vanguard Russell 2000 ETF (VTWO) stands to gain from a potential shift towards small-cap stocks driven by underperformance of major tech stocks and favorable economic conditions.
VTWO, like IWM, tracks the Russell 2000 Index. A shift in investor focus to small-caps due to macroeconomic factors would likely boost VTWO's performance.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80