Call it the return of the little guys.
Since the 2016 market low on Feb. 11, the smaller stocks have been taking over.
Investors who bought the S&P 500 companies on an equal-weighted basis, putting a dollar in each company, would be outperforming the true S&P 500 index, which is weighted by market cap, meaning most money is in the bigger names like Wal-Mart, Facebook and Alphabet.
Most major indexes are weighted based on market cap, meaning that big-company components can swing the index more than the little ones. For example, a 20 percent move in Apple can shift the entire index by more than half a percent.
An equal-weighted index, on the other hand, treats all the companies the same in terms of how they can influence the market. The argument goes that equal weighting isn't as susceptible to individual blips in particular companies.
The equal-weighted index is up more than 10.5 percent since the Feb. 11 low. That beats the market by almost 2 full percentage points. The Russell 2000, a standard measure of small-cap stocks, is up 11.7 percent in that same time.
Wednesday was a good example of that, when the equal weighted index beat the true index by nearly half a percent.
The market-weighted S&P 500 itself is up 8.6 percent over its recent low. All the big names that get most of the attention are up, but just not as much as less visible companies: Think Cincinnati Financial, Ross Stores and Campbell Soup.
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