Summary

• The first quarter of 2026 ended with a decisive shift in equity leadership. The Russell 2000 Value Index gained 5.0 percent, while the Russell 2000 Growth Index fell 2.8 percent.
• Small-cap value typically outperforms in periods of elevated uncertainty and economic expansion, while growth tends to lead in earnings-starved or rapidly accelerating environments.
• The quarter marked the fourth consecutive period in which small and micro-cap stocks beat their large-cap counterparts, solidifying a leadership cycle that began in April 2025.
• Four of the eleven sectors in the Russell 2000 finished the first quarter in the black. Energy, industrials, and materials made the largest positive contributions.

Value Wins the Quarter

The first quarter of 2026 ended with a decisive shift in equity leadership. The Russell 2000 Value Index gained 5.0 percent, while the Russell 2000 Growth Index fell 2.8 percent. The 7.8 percentage

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