Bullish
🤖 50%
Stock Rotation Trade Poised for Comeback, Says Wellington’s Geary
Small-caps often benefit during rotation trades as they are more value-oriented and domestically focused, gaining from reflation hopes.
Risk Factors
- ▼ Economic slowdown could hurt small-caps more
- ▼ Liquidity concerns in small-caps may limit gains
▼ Show FAQ (2) ▲ Hide FAQ
How does a rotation affect small-caps?
Small-caps tend to be more sensitive to economic reflation and often outperform large-caps during rotation cycles.
Is IWM a pure play on the rotation trade?
IWM offers exposure to small-caps which are highly correlated with domestic economic strength; however, it also carries higher volatility and sector biases.