Small-cap & Crude winners YTD

Small-caps and crude oil have been the big winners YTD. The Russell 2000 index and the April WTI Crude Oil futures contract had strong gains in both January and February.

The YTD small-cap return continues gains from the end of 2020 with the Russell 2000 increasing 43% for the four months ending February. This is a strong relative return too with the S&P 500 gaining 17% for the same period. Also, value has outperformed growth while the NASDAQ-100 has been flat.

Although gold continues to be a laggard, many commodities have performed well. Crude oil production in the U.S. fell last year and the expected economic growth in 2021 should help the supply/demand balance. Soybean prices are benefitting from a resumption of Chinese demand as a result of replenishing hog herds.

Rising interest rates this year have resulted in losses for bond markets. The Bloomberg Barclays US Aggregate Bond etf (AGG) and the etf tracking the iBoxx Liquid HY index (HYG) had negative returns for both months.