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There are any number of ways to illustrate the disparate performance of individual stocks based on market cap this year, but the chart below really drives the point home.
The blue lines show the YTD performance of each stock in the S&P 500 starting with the largest in terms of market cap on the left all the way down to the smallest companies on the right.
YTD, the second-best performing stock in the S&P 500 – Nvidia (NVDA) – is also the fifth-largest company in terms of market cap.
Besides NVDA, the only two other stocks up at least 15% YTD are Palo Alto Networks (PANW) and Juniper (JNPR).
While just three stocks are up over 15%, seven are down over 15%, including Archer Daniels Midland (ADM) and Boeing (BA) which is down nearly 19%.
While the blue line shows the performance of the individual components, the red line shows the rolling 20 stock performance where the leftmost point on the line represents the performance of the 20 largest stocks in the S&P 500.
As shown, the group of 20 stocks with the strongest YTD performance this year is right near the top of the market cap list (stocks 5 through 24 which includes NVDA and AMD).
While there are exceptions, the main trend this year has been that the further you move down the market cap ladder, the weaker the YTD returns.
The 20 smallest stocks in the S&P 500 also have the worst performance of any other point in the series. Not only that, but 17 of the 20 smallest stocks in the S&P 500 are down YTD, including each of the smallest sixteen.
Breaking the S&P 500 into deciles based on market cap further illustrates this pattern.
While 78% of the 50 largest stocks in the S&P 500 are up YTD with an average gain of 3.65%, less than a quarter of the 50 smallest stocks in the index are up YTD, and the average performance of those 50 stocks is a decline of 4.18%.
If 2024 is going to be the year of broadening, it’s getting off to a slow start.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
