Penny stocks (small caps) are winners again. They are even beating big stocks.

The Russell 2000, the most quoted small cap index is up over 6.5% this year. In contrast, the Dow and the S&P 500 are basically breakeven.

Small cap stocks are back in fashion for two main reasons: they aren’t hurt much by the strong dollar or the sluggish global economy.

A strong dollar cuts into profits and makes it harder to export goods made in America. But small companies don’t have that problem. They do most, if not all, of their business in the U.S. On average, the companies in the S&P 500 get 40% of their revenues from overseas.

More penny stock picks.