IFA Index Portfolio 100 S2B2S2B2100IFA Index Portfolio 95 S2B2S2B295IFA Index Portfolio 90 S2B2S2B290IFA Index Portfolio 85 S2B2S2B285IFA Index Portfolio 80 S2B2S2B280IFA Index Portfolio 75 S2B2S2B275IFA Index Portfolio 70 S2B2S2B270IFA Index Portfolio 65 S2B2S2B265IFA Index Portfolio 60 S2B2S2B260IFA Index Portfolio 55 S2B2S2B255IFA Index Portfolio 50 S2B2S2B250IFA Index Portfolio 45 S2B2S2B245IFA Index Portfolio 40 S2B2S2B240IFA Index Portfolio 35 S2B2S2B235IFA Index Portfolio 30 S2B2S2B230IFA Index Portfolio 25 S2B2S2B225IFA Index Portfolio 20 S2B2S2B220IFA Index Portfolio 15 S2B2S2B215IFA Index Portfolio 10 S2B2S2B210IFA Index Portfolio 5 S2B2S2B25IFA Index Portfolio 0 S2B2S2B20

What a difference two months makes. US small cap and value stocks came out of the gates on a tear in 2026. On the other hand, large cap stocks, particularly those within growth, have lagged. The two-month return difference between large cap value and growth, at 12.1%, was the fifth largest among all rolling two-month periods since January 1979.1

The turnarounds for small cap and value show up dramatically in one-year numbers. Relative returns for small versus large and value versus growth all flipped from negative to positive when the one-year end date moved from December to February. That's despite 10 of the 12 months being identical in both samples.

This is one of the reasons why trying to time markets is so perilous. Missing outsized periods of returns can put a dent in your long-term performance.

As impressive as this turnaround was, it may underestimate the premiums available for investors to harvest this year. Commercial indices often have style drift from irregular rebalancing. A systematic investment strategy with focused, targeted exposure to small cap and value stocks could have achieved an even more pronounced outperformance.

Bar graph for small minus large, small value minus small growth, and large value minus large growth for two dates: as of December 31, 2025, and as of February 28, 2026. As of December 31, 2025: small minus large is −4.56%; small value minus small growth is −0.42%; large value minus large growth is −2.65%. As of February 28, 2026: small minus large is 6.60%%; small value minus small growth is 3.07%; large value minus large growth is 3.58%.


Footnotes

 1. Based on rolling two-month return differences between the Russell 1000 Value Index and the Russell 1000 Growth Index from January 1979 to February 2026.


This article originally appeared March 23, 2026, in DFA's Perspectives series article. (https://www.dimensional.com/us-en/insights/reality-check-capital-market-assumptions-vs-actual-returns)

This article is reprinted with permission from Dimensional Fund Advisors LP (DFA) and reflects the views of its original author, Wes Crill. The content and opinions expressed are those of the author and not necessarily those of Index Fund Advisors, Inc. (IFA). This article is provided for educational purposes only and does not constitute investment advice, a recommendation of securities, or an endorsement of any specific strategy by IFA. Investors are encouraged to consult with a qualified financial professional to address their individual circumstances before making any investment decision.

 


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About the Author

Wes Crill

Wes Crill - PhD, Senior Investment Director and Vice President - Dimensional Fund Advisors

Wes earned a BS and a PhD in materials science engineering from North Carolina State University. As a member of the Investment Solutions Group at Dimensional Fund Advisors, he directs empirical research on a broad range of investment topics to support client relations.

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Wes Crill
Written By Wes Crill

PhD, Senior Investment Director and Vice President - Dimensional Fund Advisors

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