Small-cap investors enjoyed a great year in 2020.

When looking at small-cap vs large cap-performance, it’s plain to see.

In 2020, the Russel 2000, a small-cap index, produced a 20% return, surpassing the S&P 500’s 16.3% return.

But since March 2021, the small-cap market has moved laterally.

But why are small-cap funds falling?

Between market factors changing, inflation, and the inherent risk that comes with investing in small-cap stocks, small-cap companies had a rough year in 2021.