Year-to-date, the Russell 2000 has outperformed the S&P 500 by a significant margin. The small cap index had a YTD return of 23.04% as of July 2, 2026, while the S&P 500 had a return of 10.58%. Not once this year has the S&P 500 closed ahead of the Russell 2000.
Contributing to Russell’s strong YTD performance is a combination of stellar sector-wide performance and a more diversified sector mix . Across 11 industries, small cap stocks have outperformed large cap in all but two: materials and utilities. The Russell 2000’s more balanced sector weighting means it captures more of the broad-based strength, rather than depending on a handful of sectors to drive returns.
Since its inception in 1984, the Russell 2000 has outperformed the S&P 500 in 20 of 41 years. On average, the Russell 2000 has trailed the S&P 500 by approximately 1.43 percentage points per year.
2003 was the best year for small caps, relative to their larger counterparts, when the Russell 2000 outperformed the S&P 500 by approximately 19 percentage points. Given that small caps have outperformed large caps by 12.46 percentage points YTD, 2026 may be a record setting year for the Russell 2000.
