Small-cap stocks are starting to outperform again, but ETF investors remain focused on mega-cap technology and AI stocks, leading to small-cap ETFs holding only about 4% of ETF assets down from 10%. Despite $25 billion outflows from small-cap mutual funds, some strategists see this as a buying opportunity because small caps trade at attractive valuations compared to large-cap growth stocks. The current lack of strong inflows might mean the small-cap rally is still early, especially if interest rates stabilize and economic growth broadens. Investors can consider ETFs like IWM, IJR, VB, and VBK for small-cap exposure, ideally adding gradually due to higher volatility.
The Vanguard Small-Cap Index Fund ETF (VB) tracks the CRSP US Small Cap Index, holding about 1,300 mid-sized U.S. companies with a focus on steady growth and low fees. With Kevin Warsh expected as the new Federal Reserve Chair, a gradual path of inte...
The WisdomTree U.S. SmallCap Dividend Fund (DES) pays monthly dividends based on cash payouts from small-cap U.S. companies, mainly in industrials and financials. While the fund's income stream is supported by rising corporate profits, its dividend p...
The iShares Russell 2000 ETF (IWM) and Vanguard Russell 2000 ETF (VTWO) both track the same 2,000 small-cap stocks but differ in cost and trading features. IWM offers deep options liquidity and trading efficiency with a higher 0.19% fee, ideal for tr...
