With the stock market rebounding since March, small- and mid-cap stocks have led the way, true to textbook cases of the beginning of bull markets, The Wall Street Journal reports.

As proof of this, the Russell 2000 Index is up 29% year to date through Thursday, far ahead of the S&P 500’s 14% gain. Even within the S&P 500, the top 50 stocks are up 19%, whereas of the remaining 450 stocks, 373 are up an average 30%.

The Journal also took a look at the average market cap of large-, mid- and small-cap stock funds along with their average performance, reasoning that as a category increases in value, the average market capitalization of the stocks in the category should increase. But this was not the case with large-cap stock funds, whose median market cap fell 30 basis points in the first half of the year, whereas they returned an average 11.5%. In addition, the median market cap for mid-cap funds increased 7.1%, far less than their 14.8% increase.

"We want to be down the ladder because small is beautiful in this kind of market," William Batcheller, manager of the Armada Equity Growth Fund, told The Journal.

The categories performing the strongest are technology, telecom and energy – three sectors that were among the hardest hit during the bear market.

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