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Small-Cap stocks have been some of the market's strongest recent performers, with year-to-date returns for the Russell 2000 Index up approximately 20%.
Small-cap value has been one of the loudest asset classes in the market over the past year, and the tax bill on that ride depends entirely on which account holds it.
The small-cap equities world carries a number of risks—unproven companies, higher volatility, and so on—but also brings the opportunity for growth that may outpace some larger names. International small-cap names may be heating up, and while small-cap stocks in the United States have already had a good run, many valuations remain comparably attractive when held up against mega-cap tech stocks and other top names.
Small-cap value is one of the most persistent factor bets in equity research, but the two most popular ways to own it look almost nothing alike under the hood.
Open your brokerage app and check the allocations. If you own a target-date fund, an S&P 500 index fund, or a portfolio your advisor built in the last decade, odds are nine out of every ten dollars sit in US stocks.
2026 is more than halfway done, somehow, after a whirlwind start defined by volatility. Geopolitical risk and AI bubble risk were the headline drivers, even as portfolios were rewarded by strong tech earnings.
The Avantis U.S. Small Cap Value ETF (NYSEARCA:AVUV) is having the kind of year that small-cap value advocates have been promising since 2021.
The Vanguard Total Stock Market ETF (VTI) is the best core equity ETF investors can choose. The Invesco Nasdaq-100 ETF (QQQM) adds some above-average growth potential, which is ideal if you're holding for decades.