According to the Wall Street Journal Website, average trailing 12-month P/E ratios on the major large-cap indices are currently (late September, 2011) around 12-14, which is slightly cheap compared to the very long-term historical record and very cheap compared to recent history.

However, the Russell 2000's average P/E is about 40. There seems to be tons of data on the typical historical P/E ratios for large cap indices, but not so much on small cap indices like the Russell 2000.

Is this huge difference in P/E between the large cap indices and the Russell 2000 historically typical – since small-caps are generally faster-growing companies – or is it unusual?


There is most likely an error in the WSJ's data. Yahoo! Finance reports the P/E on the Russell 2000 to be 15 as of 8/31/11 and S&P 500 P/E to be 13 (about the same as WSJ).

Good catch, though! E-mail WSJ, perhaps they will be grateful.

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    I wouldn't trust Yahoo! more than Google, necessarily. Rather than sourcing information from either intermediary, one could check Russell Invesments, which manages the Russell 2000 index. Currently reads P/E of 16.69. Of course, there are a handful of "Russell 2000" indexes .. need to make sure one is looking at the right one. – Chris W. Rea Sep 26 '11 at 0:33
  • Alsoo remember that by the time a number gets published -- including via a search/aggregator -- it will have changed. Take these as samples, not as absolutes. And of course "Past results are no guarantee of future performance." – keshlam Dec 1 '15 at 17:41

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