Two months ago, small caps were beating large caps by 10 points this year. Now? Large caps are back in the lead.
What flipped? Rising rates and higher borrowing costs hit smaller companies way harder. They don't have the balance sheets or access to cheap capital that the big guys do.
This is textbook: when the cost of money goes up, size matters. Small caps live on leverage and refinancing — squeeze that, and performance follows.
Not rocket science. Just rates doing what rates do.
What flipped? Rising rates and higher borrowing costs hit smaller companies way harder. They don't have the balance sheets or access to cheap capital that the big guys do.
This is textbook: when the cost of money goes up, size matters. Small caps live on leverage and refinancing — squeeze that, and performance follows.
Not rocket science. Just rates doing what rates do.