# Large caps vs small caps | PIER20 benchmarks

Are large caps leading small caps, or is the small-cap trade working?

The large caps vs small caps benchmark compares the S&P 500 (SPY) with the Russell 2000 (IWM), both rebased to 100 at their shared start. A small-cap line above the large-cap line means smaller companies have outperformed larger ones over the window; below means mega-caps and large caps are winning. The spread tracks the small-cap premium that factor-investing research has documented across cycles.

As of **11 Aug 2026**, the Large caps (SPY) line stands at **890.0** and the Small caps (IWM) line at **924.5** (both base = 100 at the shared start). The Large caps (SPY) line is up 22.7% over the past year and above its long-run median of 152.3.

## Summary statistics (full history)

| Series | First | Latest | Min | Max |
|---|---|---|---|---|
| Large caps (SPY) | 100.0 | 890.0 | 57.3 | 892.0 |
| Small caps (IWM) | 100.0 | 924.5 | 73.1 | 925.8 |

## Last 24 readings

| Date | Large caps (SPY) | Small caps (IWM) |
|---|---|---|
| Jul 2026 | 867.1 | 912.0 |
| Jul 2026 | 870.8 | 908.2 |
| Jul 2026 | 864.2 | 900.5 |
| Jul 2026 | 867.2 | 903.7 |
| Jul 2026 | 870.7 | 907.5 |
| Jul 2026 | 866.0 | 907.0 |
| Jul 2026 | 857.4 | 902.2 |
| Jul 2026 | 856.0 | 896.9 |
| Jul 2026 | 863.1 | 909.9 |
| Jul 2026 | 862.1 | 901.5 |
| Jul 2026 | 851.5 | 896.2 |
| Jul 2026 | 852.4 | 893.4 |
| Jul 2026 | 852.5 | 898.8 |
| Jul 2026 | 854.6 | 900.2 |
| Jul 2026 | 841.4 | 885.4 |
| Jul 2026 | 855.5 | 897.8 |
| Jul 2026 | 861.7 | 893.5 |
| Aug 2026 | 874.0 | 908.9 |
| Aug 2026 | 889.7 | 925.8 |
| Aug 2026 | 888.0 | 919.8 |
| Aug 2026 | 886.5 | 915.1 |
| Aug 2026 | 892.0 | 925.3 |
| Aug 2026 | 891.7 | 920.4 |
| Aug 2026 | 890.0 | 924.5 |

## How to read this benchmark

**What a positive or negative spread means.** When the IWM line runs above the SPY line, small caps are leading. Small-cap leadership is an early-cycle signal, marking recoveries, rising-rate regimes and domestic-growth rotations. When SPY leads, large caps are winning, typically during late-cycle periods, risk-off episodes or when mega-cap technology is doing the heavy lifting for the index. The current spread is roughly flat in the latest reading despite small caps holding a narrow lead.

**Why Russell 2000 and S&P 500 as the pair.** SPY and IWM are the two most liquid ETFs covering large-cap and small-cap US equities, and both are total-return (split- and dividend-adjusted), so the comparison reflects the actual experience of an allocator sizing the size factor. Russell 2000 is the standard small-cap benchmark in the factor-investing literature, which makes the spread directly comparable to academic size-factor research.

**Limitations.** The Russell 2000 is more cyclical, more domestic and more financially leveraged than the S&P 500, so the spread reflects sector and leverage effects on top of the pure size factor. IWM also carries higher turnover and front-running from index-rebalance flows. The window begins in May 2000, so it captures the dot-com unwind but misses earlier small-cap cycles. Treat the chart as context for the size factor, not investment advice.

**Historical extremes.** On the rebased scale (100 at May 2000), IWM sits near 896 while SPY is near 851, so the cumulative spread is narrow: small caps lead by roughly 5 percentage points over the full 25-year window. Small caps led sharply through 2013-2014 during the post-crisis recovery, then underperformed badly through the 2015-2016 energy bust and the 2020-2024 mega-cap technology rally. The current reading reflects a modest small-cap recovery rather than a regime change.

## How this benchmark is used

**Size-factor positioning.** Factor investors use the small-cap premium (small minus large) as one of the original Fama-French factors, and this spread is the live, investable version of that academic construct. Quants and factor allocators use the spread's direction and momentum to time tilts toward or away from small-cap exposure.

**Business-cycle regime classification.** Small-cap leadership is a classic early-cycle signal: small companies with high operating leverage and domestic revenue bases tend to outperform when the economy is accelerating out of a recession. Large-cap leadership is a late-cycle or risk-off signal. Strategists use the spread, alongside the yield curve and PMIs, to label the business-cycle regime.

**Mega-cap concentration vs broad-market health.** Because the S&P 500 is cap-weighted, sustained SPY outperformance can mean either broad large-cap strength or just a handful of mega-caps doing all the work. Allocators cross-reference this spread with the equal-weight-vs-cap-weight benchmark to distinguish broad large-cap leadership from mega-cap index concentration.

## Frequently asked questions

**What is the current large caps vs small caps?**

As of 11 Aug 2026, the Large caps (SPY) line stands at 890.0 and the Small caps (IWM) line at 924.5 (both base = 100 at the shared start). The Large caps (SPY) line is up 22.7% over the past year and above its long-run median of 152.3.

**How often is this benchmark updated?**

This benchmark is built on daily data. The page is refreshed when the source publishes new observations; the freshness block below the chart shows the exact data-through date and when PIER20 last fetched the file.

**What data sources does this chart use?**

The chart is built from Large caps (SPY) and Small caps (IWM), sourced from Yahoo Finance.

**Have small caps beaten large caps over this window?**

Barely. Since May 2000 the IWM line has risen to roughly 896 while the SPY line sits near 851, so small caps lead by roughly 5 percentage points on the rebased scale. That narrow lead hides huge swings: small caps led sharply through 2013-2014 then underperformed badly during the 2020-2024 mega-cap rally, with the recent reading reflecting a modest recovery rather than regime change.

**What does the small minus large spread mean?**

The summary callout measures how much the IWM line has outperformed (positive) or underperformed (negative) the SPY line over the selected window, expressed as a percentage. A positive reading means small caps have beaten large caps; a negative reading means large caps have won. The convention follows the catalog's 'small minus large' label.

**When do small caps typically outperform large caps?**

Small-cap leadership historically clusters in early-cycle recoveries when domestic growth accelerates, in rising-rate regimes when smaller companies with floating-rate exposure can pass through costs, and during commodity booms when energy and materials small caps lead. The 2013-2014 post-crisis recovery was a clear example. The opposite regime, large-cap leadership, tends to dominate in late-cycle and risk-off periods.

**How is this different from equal-weight vs cap-weight?**

This benchmark compares the small-cap universe (Russell 2000) with the large-cap universe (S&P 500), so it isolates the size factor across two different index universes. Equal-weight vs cap-weight compares two different weightings of the same S&P 500 constituents, so it isolates intra-index concentration. The two can diverge: large caps can beat small caps while equal-weight beats cap-weight, which happens when average large caps beat their own mega-caps.

## Methodology

- Formula: SPY and IWM adjusted close indexed to 100 at the shared start
- Frequency: Daily
- Sources: Large caps (SPY) https://finance.yahoo.com/quote/SPY; Small caps (IWM) https://finance.yahoo.com/quote/IWM. Data via Yahoo Finance.
- Data through: 11 Aug 2026
- Last refreshed: 11 Aug 2026

## Related benchmarks

- [US vs international equities](https://pier20.com/benchmarks/us-vs-international)
- [Growth vs value](https://pier20.com/benchmarks/growth-vs-value)
- [Nasdaq-100 vs broad market](https://pier20.com/benchmarks/nasdaq-vs-broad-market)
- [Equal-weight vs cap-weight](https://pier20.com/benchmarks/equal-vs-cap-weight)

Full interactive chart: https://pier20.com/benchmarks/large-vs-small-cap
Disclaimer: research software output, not investment advice.