2021’s stock market performance was shaped by big-company vs. small-company stocks, rather than value vs. growth, for the first time in years, reports an article in Morningstar. The biggest U.S. companies outperformed their small counterparts by the widest margin since 2010: 13 percentage points. However, that lead comes after small-company stocks outperformed large-company during the first half of the year, and now strategists are saying that small-company stocks again have the advantage from an investment opportunity standpoint.

At the start of the year, amid optimism about the economy, domestic and global reopening, and central banks promising to keep interest rates low, investors favored higher-risk stocks (“risk-on”). On June 1, the Morningstar U.S. Small Cap index was up 17%, well over mid-cap’s 15% and large-cap’s 11%.

After that, the tables turned. Supply-chain disruptions and inflation fears, along with the coronavirus variants and the Fed’s indication that they’d be pulling back support, led investors to seek haven in larger, less-risky stocks like Microsoft and Apple (“risk-off”). The Morningstar U.S. Large Cap index rose 12.4% since June, while small-caps are down 3.9%.

It’s a much different narrative than 2020, when high-growth companies saw the biggest gains and the Morningstar Small- and Mid-Growth indexes were basically tied with returns of over 40%. 2021 is much more about size, with large growth and large blend leading the Morningstar U.S. Market index as of mid-December. The main reasons for this, according to Morningstar strategists quoted in the article, are that the large-cap portion has a greater percentage of stocks in the tech and communications sector that benefit from the shift in consumer spending from services to goods, and the small-cap portion of the market, along with the value side, is trading below their fair value estimates, making it the least expensive section.