Category: Micro Cap Commentaries

Market Review The second quarter of 2026 was a powerful risk-on rebound from the first quarter, with the Russell Microcap® Index gaining 25.6% in the quarter. The rally was primarily driven by strength in artificial-intelligence and semiconductor companies. The macro backdrop stayed complicated: oil, which had spiked in early April as the Iran conflict disrupted supply…

Market Review The Russell Microcap® Index returned 1.49% in the first quarter of 2026, outperforming the (4.33)% decline in the S&P 500® and also outperforming the Russell 2000® small cap index.  Solid performance from microcap equities early in the year was largely reversed by a nearly 5% decline in the benchmark during March, as geopolitical and…

Market Review The Russell Microcap® Index returned nearly 23% in 2025, outperforming both large and small cap US equity indices during the year (see Figure 1).  The underpinnings of this robust performance were concentrated in early-stage businesses, with Biotech/Pharma contributing 10.2 ppts (~44% of the total return) while a group of 9 companies tied to…

Market Review The Russell Microcap® Index returned 17.03% in the third quarter of 2025 and is now up 15.74% on a year-to-date basis.  This is a dramatic recovery from the 14.39% decline the index experienced in the first quarter of the year.  The primary driver behind this resurgence in index performance has been the performance of…

Market Review The Russell Microcap® Index returned 15.51% in the second quarter of 2025, driven by improving sentiment regarding the potential impact of chances in U.S. trade policy and strong performance from several early stage and AI-oriented index constituents.  In a reversal from Q1, the Information Technology sector was the best performer in the index during…

Market Review The Russell Microcap® Index declined 14.39% in the first quarter of 2025, as uncertainty regarding policy changes planned or enacted by the Trump administration resulted in increased cautiousness from investors and corporate decision makers.  The Information Technology sector was the worst performer in the index during Q1, declining 27.07%.  The best-performing sector was Utilities,…

Market Review The Russell Microcap® Index returned 5.89% in the fourth quarter of 2024, outperforming the Russell 2000® +0.33%, Russell 1000® +2.75% and S&P 500® +2.41%. Unusually robust performance from early-stage companies with exposure to themes such as aerial drones, quantum computing, and artificial intelligence were important contributors to the index performance this quarter. At the…

Market Review The Russell Microcap® Index returned 8.29% in the third quarter of 2024, as optimism regarding a more accommodative monetary policy from the U.S. Federal Reserve and indications of economic resilience buoyed U.S. equity prices. Reflecting the outlook for lower rates, the Real Estate, Financials and Health Care sectors were the best performers in…

Market Review The Russell Microcap® Index decreased -5.27% in the second quarter of 2024, as investors adjusted to the reality that inflation is likely to remain elevated for longer and fewer, if any, interest rate cuts may occur this year. Consumer Staples led the way in the Russell Microcap® index during the quarter, returning 6.24%.…

Market Review The Russell Microcap® Index increased 4.68% in the first quarter of 2024, as stable economic conditions in the U.S. and a shift in sentiment toward Health Care companies drove the index higher.  After a challenging 2023, the Health Care sector led the way in the Russell Microcap® index during the quarter, returning 14.54%.  Within…

Market Review The Russell Microcap® Index increased 16.06% in the fourth quarter of 2023, as investor sentiment turned toward the potential impact of interest rate cuts and slowing inflation in 2024. This dramatic change in expectations precipitated a significant rebound in every sector except for Energy during Q424, which declined 3.23% yoy due to weakening international…

Market Review The Russell Microcap® Index declined 7.93% in the third quarter of 2023, as investors focused on the risks associated with the rapid rise in interest rates.  Companies with meaningful exposure to big ticket capital projects and those with higher corporate debt levels have become increasingly out of favor.  We continue to see inventory…

Market Review The Russell Microcap® Index increased 5.29% in the second quarter of 2023 as concerns around financial institutions and consumer spending became less pronounced through the quarter.  The Microcap Health Care sector increased by 11.81% given a rebound in M&A transactions, increased procedure volumes, and an improved funding environment for early-stage development companies. While only…

Market Review The Russell Microcap® Index declined 2.83% in the first quarter of 2023 as liquidity concerns in the regional and community bank industry drove equity valuations lower, particularly in the month of March.  Microcap regional banks declined nearly 18% during March as the disruption in the industry took center stage.  Seven of the 11 Russell…

Market Review The Russell Microcap® Index increased 4.72% in the fourth quarter of 2022 as markets began pricing a potential for peak inflation and slowing interest rate hikes in 2023. During fourth quarter, only one sector, consumer staples, declined in the benchmark, while the top 3 sectors – energy, materials, and industrials– all generated double-digit increases.…

Market Review The Russell Microcap® Index declined 0.48% in the third quarter of 2022, as US Federal Reserve rate increases and concerns regarding an impending recession remained top-of-mind for many investors.  The distribution of returns by sector was significant in the quarter (a 26-percentage point spread between the best and worst), with six sectors declining by…