3 Small-Cap ETFs With Big Upside Potential

Core Insights - Small-cap stocks and ETFs may not always outperform larger indices but can offer significant hidden investment opportunities [1] Group 1: Avantis International Small Cap Value ETF - The Avantis International Small Cap Value ETF (AVDV) provides excellent diversification, focusing solely on international small-cap value stocks with a 0.36% expense ratio and a 2.84% yield [2] - AVDV consists of over 1,600 stocks, with less than 10% of total assets in its top 10 holdings; seven of these have more than doubled in value over the past year, particularly in the gold and precious metals sectors [3] - The fund has achieved an annualized return of 15.6% over the past five years and has increased by over 60% in the last year, showcasing the potential of small-cap investments [4] Group 2: Dimensional U.S. Small Cap ETF - The Dimensional U.S. Small Cap ETF (DFAS) aims to maximize returns while minimizing federal income taxes, featuring a 0.27% expense ratio, a 0.94% yield, and an annualized return of 11.5% over the past decade [5] - DFAS is diversified across more than 2,000 stocks, with its top 10 holdings constituting only 3% of total assets; nine of these holdings have increased in value over the past year, with six more than doubling [6] - Financial and industrial stocks account for nearly 40% of the fund's assets, with technology, consumer cyclicals, and healthcare also contributing significantly to returns [7] Group 3: Schwab Fundamental U.S. Small Cap Company ETF - The Schwab Fundamental U.S. Small Cap Company ETF (FNDA) includes over 800 small-cap stocks, emphasizing value; seven of its top 10 holdings have risen by over 100% in the past year, although these holdings represent only 5% of total assets [8] - FNDA also focuses heavily on industrial stocks, which make up more than 20% of the portfolio, alongside financials, consumer cyclicals, technology, and real estate, each exceeding 10% of total assets [9] - The fund has generated an annualized return of 11.8% over the past decade, with a 0.25% expense ratio and a 1.15% yield [9]