Small-cap value stocks outperform large growth in 2026, led by three key ETFs.

In 2026, small-cap value stocks have significantly outperformed large growth stocks, reversing the trend of the previous decade. This shift is highlighted by three ETFs—Avantis U.S. Small Cap Value (AVUV), iShares S&P Small-Cap 600 Value (IJS), and Vanguard Small-Cap Value (VBR)—each capturing the value premium through different strategies. AVUV leads with an active, profitability-focused approach, returning 18% year-to-date, while IJS offers a quality-screened passive option, and VBR provides the broadest, lowest-cost exposure. This rotation reflects investor moves away from overvalued large growth stocks, emphasizing quality and value in smaller companies, with fund selection critical to capturing the premium.