The S&P 600 and the Russell 2000 small-cap indexes differed widely in performance in the first quarter, highlighting significant disparities between the two benchmarks, according to a new report from Goldman Sachs. The S&P 600 had a total return of 7% in the first three months of the year, compared with 4% for the Russell 2000. The S&P 500 was up only 0.3% for the quarter.
After Russell’s annual rebalancing in June, the report predicts the Russell 2000 will be more heavily weighted to technology, up to 16.05% from 13.2%, and health care, to 12.99% from 11.42%. But financial services, despite a drop to 19.97% from 22.01%, and consumer discretionary, falling to 17.17% from 18.82%, will dominate the index.
Technology is the current dominant sector in the S&P 600, at about 16%.
Also, according to the report, pension fund officials will prefer domestic small-cap equities over large-cap as they "reconsider their equity allocations” in the second quarter.
