Why Small-Cap Stock Pickers Crushed It
Active investors got some big things right in 2021 but also had help from the unusually broad array of winners.
It turns out that professional investors who spent the year complaining about how hard their lives had become, with retail day traders overrunning markets and the economy opening and closing and opening, came all out all right in the end. A surprising number of them pulled off the rare feat of beating the market.
At least, that’s the case in one speculative corner of the mutual fund world, the core small-cap category. Early returns show that 86% of these managers beat the benchmark Russell 2000 index of small companies over the last 12 months, including a 90% beat rate in December. The proportion is the highest ever recorded in data compiled by Jefferies Financial Group Inc. starting in 1999.