Stats › Annual and index returns › Small caps
Small caps and the Russell 2000
Small caps are the part of the market people assume ought to return more, on the reasoning that smaller companies are riskier and riskier things are supposed to pay you for it. That idea has a name in academic finance, the size premium, and it is one of the oldest documented factors there is. For most of the last decade it has not shown up. Across the eleven complete years from 2015 to 2025 the Russell 2000 lagged the S&P 500 in seven of them, sometimes by very wide margins. Then 2026 happened. The Russell is up 18.5% year to date against the S&P 500's 7.58%, the widest gap in the other direction anywhere in this run.
This page has the returns side by side year by year, the reason the index itself is part of the story, and what the 2026 reversal looks like next to the other breadth data on the site. That middle part gets skipped a lot. The Russell 2000 has no profitability requirement, so a meaningful share of it loses money, and comparisons against the S&P 600, which does screen for profits, consistently favour the S&P 600. Some of the small cap underperformance story is about how the index is built rather than about small companies as a class.
Two sources with slightly different as of dates in late July 2026, plus one more for the breadth figures, all linked at the foot. The returns use IWM as a proxy for the index, which is worth knowing before you compare them against anything else.
The Russell 2000 returned +18.5% in 2026 to date, ahead of the S&P 500's +7.58%, after a decade in which small caps mostly lagged. Its annualised return from 2001 to 2026 is about 8.5% with dividends reinvested. The worst recent year was 2022 at -20.5%, deeper than the S&P 500's -18.11%, and 2015 and 2018 were also negative. Small caps carry a documented long run premium and have spent most of the last fifteen years failing to deliver it.
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