With new market highs across the board, where is the strength coming from?

New market highs across the board.

Markets have been on an upward swing this year, making new highs on a regular basis. Contrary to what you may think, however, it’s not the largest stocks that are driving returns.

While the so-called FAANG stocks (Facebook, Amazon, Apple, Netflix and Google) have been performing well, it is actually the mid-cap stocks in quintiles two and three that have been leading the way.

Russell 1000 returns by market quintile, 2018.

All of this goes to show that market breadth is currently greater than many investors may realize.