Over the past decade, the iShares Russell 2000 ETF (IWM), representing small-cap stocks, has significantly underperformed the S&P 500 ETF (SPY) despite carrying higher volatility and risk. While small caps are expected to offer higher returns as a premium for greater risk, IWM returned 125% compared to SPY's 255% over ten years. The recent rally in small caps narrowed this gap but does not establish a consistent premium. Investors, especially those near retirement relying on small caps for growth, should reconsider their exposure as the extra risk has not been compensated with higher returns over meaningful timeframes.
The story of small-cap stocks lagging behind large caps is reflected in the current trading of the iShares Russell 2000 ETF (IWM) on Pluang. As of Oct 02, 2026 18:52 WIB, IWM trades at USD 280.93, up 0.67% for the day, with a market cap of $77.54 billion. Despite recent gains, the typical hold time of 82 days and a strong buy interest at 97% on Pluang suggest ongoing investor engagement with small caps even as the premium remains elusive.
