EXCLUSIVE: Is Small Cap Rally Scaring Away Investors? Only 1% Of Benzinga Readers Polled Are Buying Fewer Stocks, Here's How Many Are Buying More

Over the last several weeks, small-cap stocks and indexes have gained with a market rotation taking place in the second half of 2024.

A new Benzinga poll shows whether the move could gain steam or be short-lived.

What Happened: The Russell 2000 index, which is tracked by the iShares Russell 2000 ETF IWM is outperforming other major stock market indexes in recent weeks.

The iShares Russell 2000 ETF is up 10.9% over the last month, outperforming the 1.7% return of the SPDR S&P 500 ETF SPY, the -0.9% return of the Invesco QQQ Trust QQQ and the 5.8% return of the SPDR Dow Jones Industrial Average ETF DIA.

Given the recent surge in small-cap stocks, Benzinga polled readers to find out if they are adding more small caps to their portfolio.

"Are you buying more or less small-cap stocks after the historic rally?" Benzinga asked.

The results were:

• Buying more: 44%
• Buying less: 1%
• Maintaining Current Level: 34%
• Not Investing in Small Caps: 21%

Buying more small caps was the winner of the poll, beating out the option of maintaining the current level. Only 1% of readers said they were buying less. Surprisingly, 21% of readers said they are not investing in small-cap stocks currently.

Read Also: Apple, Microsoft, Meta, Google: Which Would You Buy At All-Time High? Investor Poll Reveals Split Opinions

Why It's Important: The recent gains for small-cap stocks come after large-cap stocks, especially those in the technology sector.

Freedom Capital Markets Global Strategist Jay Woods told Benzinga that the Russell 2000 is still 8% off of all-time highs, despite other market indexes hitting all-time highs.

Woods suggested that the 8% gain for the Russell 2000 is an "easy upside target."

Here's a look at the current one-year and year-to-date return of the ETFs that track the major stock market indexes:

• IWM: 1-Year: +14.8%, YTD: +10.7%
• SPY: 1-Year: +23.5%, YTD: +17.2%
• QQQ: 1-Year: +25.6%, YTD: +17.3%
• DIA: 1-year: +19.1%, YTD: +9.3%

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The study was conducted by Benzinga in July 2024 and included the responses of a diverse population of adults 18 or older. Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from 85 adults.

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