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
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