The Russell 2000 and S&P 600 indexes of small cap stocks are up more than 19% for the month - the biggest monthly percentage jump for both indexes, which date back to 1979 and the end of 1993, respectively - as investors bet recent positive trial results for COVID-19 vaccines will help pull the economy out of a recession. While smaller names typically see outsized price moments compared to their larger brethren, the small cap gains for November have nearly doubled the roughly 11% gain in the S&P 500 this month. Mega cap work-from-home leaders like Amazon.com and Netflix Inc that have benefited from COVID-19 economic restrictions had helped the S&P 500 outperform smaller names since the pandemic lows in March. But they have begun to lag of late as optimism grows that highly effective vaccines will soon be available. On Monday, Moderna Inc said it would seek U.S. and European emergency authorization for its vaccine after full results from a late-stage study showed it to be 94.1% effective in preventing COVID-19, joining Pfizer Inc in applying for emergency use. “As you got this vaccine news you started to get this rotation into the reopening side of the economy into small cap stocks, value stocks,” said Tom Hainlin from global investment strategist U.S. Bank Wealth Management’s Ascent Private Wealth Group in Minneapolis. Small cap stocks are generally seen as the first to recover as the U.S. economy pulls out of a recession. They rely less on overseas revenue and are advantaged by a heavy concentration in cyclical sectors such as financials, materials, energy and industrials that also do well as an economy begins to expand. “You’ve got a lot more domestic exposure, you have an economy doing better, that is going to work well,” said Steven DeSanctis, equity strategist at Jefferies in New York. ADVERTISEMENT According to FTSE Russell, as of Sept. 30, economically sensitive financials, industrials, materials and energy accounted for 36% of the weighting in the Russell 2000 index. In the S&P 600, those four sectors account for more than 43% of the total index weighting, per Refinitiv data. In the large cap S&P 500, the same four sectors account for about 24.5% of the overall index weighting. DeSanctis noted that even with the recent surge in smaller stocks, they are still below their long-term performance trend relative to the large cap S&P 500, giving them room to climb.