The Rotation Trade

by | Feb 9, 2021 | Investing

The so-called “rotation trade” continued into early February, after a strong Q4.  This term refers to the market “rotating” from large growth/big tech stocks to small cap and value stocks in the expectation that the vaccines will do the trick and the economy can reopen fully in the near future.

The S&P 500 Index rose 4.4% through Monday (February 8), while the small-cap Russell 2000 climbed 16%, following big gains in Q4.  Even better, the DFA small cap value fund is up over 16.5%![i]

International and emerging markets stocks are also performing well.  The DFA emerging markets core equity fund is up 7% so far this year.[ii]

That’s why we stay diversified–we never know when the “rotation trade” is coming!

[i]  Source: Morningstar Direct, data as of 2/8/2021

[ii] Source: Morningstar Direct, data as of 2/8/2021

Team  Hewins,  LLC  (“Team  Hewins”)  is  an  SEC  registered  investment  adviser;  however,  such  registration  does  not imply a certain level of skill or training, and no inference to the contrary should be made. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas.

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