US Small Caps: trend-following strategy vs buy & hold
Equities · tracked with iShares Russell 2000 ETF (IWM)
IWM tracks the Russell 2000 — about 2,000 smaller US companies, more domestic and more cyclical than the S&P 500.
Growth of 100 since 2000
buy & hold · total returnBuy & hold total return of iShares Russell 2000 ETF (IWM). The Strategy Alpha results and live signal for US Small Caps are part of Plus.
What drives US Small Caps
The US economy, credit conditions and interest rates matter more for small caps, because many of them carry floating-rate debt and are less profitable.
How a trend-following strategy handles US Small Caps
Small caps tend to fall harder in recessions and rebound sharply in recoveries. Those long phases of under- and outperformance are what trend signals try to capture.
Our Strategy Alpha applies the same simple, rules-based trend filter to every market: invested while the trend is up, in Treasury bills while it is down, checked once a month. It is not a forecast — it is a discipline that aims to keep most of the long climbs and sit out the deepest drawdowns.
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Educational content, not investment advice. Backtested results are hypothetical and do not guarantee future results. Disclaimer.