Core Insights - The recent strong performance of the Russell 2000 is linked to rising expectations of Federal Reserve interest rate cuts, rather than an improvement in the profit outlook for small-cap stocks [1] - The Royal Bank of Canada holds a "neutral" outlook on U.S. small-cap stocks for the next 6 to 12 months [1] - Historically high proportions of loss-making companies within the Russell 2000 index and a price-to-earnings ratio of 16.3, which is above average, indicate limited investment opportunities [1]