The Russell 2000 index hit an all-time intraday high on Wednesday, sneaking past its large-cap counterparts amid lingering trade tensions between the U.S. and some of its key trade partners.
Wednesday's record marks the Russell's first since Jan. 24, about a week before equities fell into a 10 percent correction. The and have not made records since Jan. 26, while the Nasdaq composite hit its most recent all-time high on March 13.
The small-cap index has also outperformed the Dow, S&P 500 and Nasdaq over the past three months, rising more than 4.5 percent. The Dow and S&P 500 are down in that time period, while the Nasdaq has gained about 2 percent.
Large-cap stocks have failed to capture record highs recently as trade tensions between the U.S. and China remain. Both countries have unveiled tariffs targeting one another. While those tensions show signs of thawing, Commerce Secretary Wilbur Ross said Monday the gap between the U.S. and China "remains wide."
The tariffs and retaliation from countries such as China put at risk large-cap companies that do a lot of business overseas. Small-cap companies, meanwhile, are less exposed to a trade war, given most of their business is domestic.
Companies in the Russell 2000 derive 21 percent of their revenue from overseas, on average, while the large-cap S&P 500 obtains 30 percent from outside the U.S., data from Bank of America Merrill Lynch shows.
"There's no risk of trade wars around the revenues of these companies. I like that," Kevin O'Leary, chairman of O'Shares ETF Investments, told CNBC's "Halftime Report" on Wednesday about small-cap stocks.
He also noted investors are underestimating the boost small-caps will get from a lower corporate tax rate moving forward. "We're going to see some big upside surprises in the next 24 months on these companies."