S&P SmallCap 600 versus the Russell 2000: A Tale of Two Benchmarks
It is well documented that the returns of two leading small-cap benchmarks, the S&P SmallCap 600 and the Russell 2000, have diverged over the last 15 years. Since its launch in 1994, the S&P SmallCap 600 has outperformed the Russell 2000 in 11 out of the 15 years. Standard & Poor’s research report determines that approximately half of the excess returns are attributable to the impact of the July effect, which is caused by the annual Russell reconstitution in June. The remaining excess return can be explained by fundamental differences in construction of the indices. Click here to access the full report.
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We have recently seen the demise of some of the great Wall Street names: Lehman, Merrill, Bear Stearns. This has brought home the need to study what makes a financial firm a survivor and a success, with the strength to forge ahead in troubled times. There is no better source than Charles Ellis’ book on Goldman Sachs.