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US indices 2023 YTD performance shown this in order: NDX>SPX>MID>RTY>RMICRO
Megacaps > Microcaps
In general, money is flowing into the big companies and out of the small companies ...

Smaller firms generally have weaker balance sheets, lower profit margins, and less market power, all of which make them highly sensitive to economic growth environments ...

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Pearl Gray Equity and Research's avatar
Small caps outperform large caps during an economic bottom, which shows we are not there yet. There is no evidence to suggest large caps are safe havens in uncertain economic times. Your ideal play for a recession is small-cap value because the return in the recession and the subsequent bounce will be very high; if you want to reduce beta risk, you phase in a low-volatility ETF with dividends.

Sources: Research Affiliates, Schroders

There is a correlation between S-Cap and Micro, the micro caps are just subject to data filtering because poor corporate governance needs to phase out the 'scammers'.

To really invest with conviction relative to the rate cycle, you need to tilt both style and sector. I will elaborate in an independent post later this week.
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