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What Led Large-Cap Stocks to Outperform Mid and Small Caps?

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Gilead, Amgen, and Vertex led large caps

Within the iShares Nasdaq Biotechnology ETF (IBB), for the week ending July 31, 2015, the top ten large-cap stocks had a weight of 56.59% of IBB’s portfolio. The top ten large-cap stocks’ average return was 3.61%—compared to a return of -5.64% for the week ending July 24, 2015. For the top ten mid-cap stocks, the average return was 2.28% and -2.60%, respectively. For the top ten small-cap stocks, the average return was 0.29% and -1.17%, respectively.

 

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The above graph shows the performances of the top ten large, mid, and small-cap stocks from July 6–31, 2015. For the week ending July 31, the large-cap stocks outperformed both mid-cap and small-cap stocks. The large-cap performance was driven by the performance of stocks like Gilead Sciences (GILD), Amgen (AMGN), and Vertex Pharmaceuticals (VRTX). All of these stocks announced good 2Q15 results.

The mid caps hold a weight of 9.67% in IBB’s portfolio. The top ten mid-cap stocks performed well. They were very close to outperforming large-cap stocks. However, they outperformed the small-cap stocks. In the mid-cap space, Alkermes (ALKS) outperformed other stocks with a return of 5.75%. It declared its 2Q15 results on July 30, 2015. According to the company’s press release, it reported revenue of $151.4 million and a net loss of $46.1 million. Although the revenue fell, the stock rose on the news of the commercial launch of the drug ARISTADA.

Large cap reverses the trend

Within IBB, large-cap stocks have been underperforming the mid-cap and small-cap stocks since the week beginning July 6, 2015. The gap widened for the week ending July 17, 2015. The gap started to come closer as of July 24, 2015. For the week ending July 31, 2015, the top ten large-cap stocks outperformed both the mid-cap and small-cap stocks.

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