Think inflation is going to creep higher?
Well, consider this. It stands to reason that larger companies do better than smaller ones during inflationary environments thanks to various economies of scale.
Citi’s Scott Chronert plotted this chart of inflation against the S&P’s performance against the small cap Russell 200 index. Since 1986 it’s been consistent. The more inflation there is, the more large caps outperform. The less inflation there is, the better it is for small caps.
Thus if you think inflation is going higher, just bet on large caps, and bet against small caps.