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Russell US Indexes Spotlight Report

Large-caps trounce small-caps in 2021, but Russell 2000 Value still wins in style US stocks rode reopening tailwinds to new heights in 2021, ultimately overcoming bouts of risk-off turbulence fueled by new virus outbreaks, surging inflation and the Fed’s recent hawkish pivot. Amid simmering worries about the US recovery, Russell 1000 and large-cap Growth extended their winning streaks in Q4, but small-cap Value retained style leadership for the year.

Highlights

Russell 1000 wins global reopening race The R1000 outperformed the R2000 and non-US peers in Q4 and 2021 amid rising worries about the global recovery and a flight into reliable high-growth stocks.

Large-cap Health & Tech underpin R1000 edge Most R1000 industries beat R2000 peers in Q4 and full year, led by Health Care & Tech. Early reopening winners helped R2000 Value retain its full-year lead.

EPS upgrade cycle normalizes Forward EPS forecasts hit fresh five-year highs across the Russell indexes in Q4. But upward revisions continued to moderate.

Valuation reset continues in Q4 Forward P/Es tightened last year but remain at five-year highs, particularly R1000 Growth after recent outperformance.

Small-cap IPOs hit record in 2021 Newcomers to the Russell US indexes hit a decade high in 2021. Health Care IPOs dominated last year, extending a long-standing trend.

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