Neon-green stock chart smashing through resistance on trading screens, symbolizing a small-cap market breakout rally. Key Points 2026 trends point to an acceleration of small-cap gains as tailwinds turn into positive feedback loops. The Russell 2000 is well-positioned in early January and could rise 45% within quarters.  Stock selection is critical as many small-cap names will struggle with competition and execution. Interested in Russell 2000 Index? Here are five stocks we like better. While the S ...

Group 1 - The Dow Jones Industrial Average and the S&P 500 reached new record highs, with the Dow increasing by 238 points, or 0.5%, and the S&P rising by 0.7% [1] - The Nasdaq Composite also gained 0.8%, although it remains significantly below its all-time high levels [1] Group 2 - The Russell 2000 index, which tracks smaller market capitalization stocks, rose by 0.8% on Friday, indicating a shift in investor focus away from popular tech stocks [2] - This performance suggests that investors are diversifying their investments beyond the major tech stocks [2]

Core Insights - The iShares SP Mid-Cap 400 Value ETF (IJJ) and Vanguard Small-Cap Value ETF (VBR) are both value-oriented ETFs targeting U.S. stocks trading below their estimated worth, but they differ in their focus on mid-cap versus small-cap companies [2][8] Cost and Size Comparison - IJJ has an expense ratio of 0.18% and assets under management (AUM) of $8.0 billion, while VBR has a lower expense ratio of 0.07% and significantly larger AUM of $59.6 billion [3][4][9] - VBR offers nearly triple the number of holdings compared to IJJ, with 840 stocks versus IJJ's 309 [3][6] Performance and Risk Metrics - Over the past year, IJJ returned 7.6% while VBR returned 8.06% [3] - The maximum drawdown over five years for IJJ is -22.68%, compared to VBR's -24.19% [5] Portfolio Composition - VBR's largest sector exposures are in industrials (19%), financial services (18%), and consumer cyclicals (13%), indicating broad diversification [6] - IJJ focuses more on mid-cap value stocks, with significant weights in financial services (19%), industrials (15%), and consumer cyclicals (12%) [7] Investment Implications - Cost-conscious value investors may prefer VBR due to its lower fees and broader small-cap exposure, while those seeking a smoother investment experience might opt for IJJ's mid-cap focus, accepting higher costs for potentially reduced volatility [10][11]

Get alerts: Dynavax Technologies, Spring Valley Acquisition, Omeros, SOBR Safe, and AlphaVest Acquisition are the five Small Cap stocks to watch today, according to MarketBeat’s stock screener tool. Small-cap stocks are shares of publicly traded companies with relatively small market capitalizations—commonly defined roughly between $300 million and $2 billion, though exact ranges vary by index provider. Investors view them as higher-growth opportunities that also carry greater volatility, lower liquidity, ...

Seedlings labeled GRC, UCTT, WTTR, EVLV and WWW sit beside a 2026 calendar and growth chart, symbolizing small-cap upside. Key Points Small-cap stocks may outperform in 2026 as investors rotate away from mega-cap tech and seek undervalued growth opportunities. These five small-cap stocks offer exposure to industrials, semiconductors, energy infrastructure, AI security, and consumer brands. Analysts see double-digit upside and strong earnings growth potential across all five names. Interested in Wolver ...

Core Insights - The Vanguard Growth ETF (VUG) and iShares Russell 2000 Growth ETF (IWO) represent two distinct strategies in targeting U.S. growth stocks, with VUG focusing on large-cap companies and IWO on small-cap firms [1][2] Cost & Size Comparison - VUG has a significantly lower expense ratio of 0.04% compared to IWO's 0.24%, which can benefit cost-conscious investors over time [3] - As of December 14, 2025, VUG has a one-year return of 14.52%, outperforming IWO's 9.83% [3] - VUG's assets under management (AUM) stand at $357.4 billion, while IWO has an AUM of $13.2 billion [3] Performance & Risk Metrics - Over the past five years, IWO experienced a maximum drawdown of -42.02%, while VUG had a lower drawdown of -35.61% [4] - An investment of $1,000 in VUG would have grown to $1,984 over five years, compared to $1,212 for IWO [4] Portfolio Composition - VUG allocates over 50% of its portfolio to technology stocks, with top holdings including Nvidia, Apple, and Microsoft, indicating a concentration risk [5] - IWO has a more balanced sector allocation across technology, healthcare, and industrials, with its top holdings representing less than 2% of assets, thus reducing company-specific risk [6] Investment Implications - VUG's focus on large-cap industry leaders may result in less risk but also greater volatility due to its concentration in a few stocks [7][10] - IWO's broader diversification across over 1,000 small-cap stocks may lead to higher volatility but offers potential for explosive growth if any of its holdings perform exceptionally well [8][9]

Core Insights - The Fidelity Enhanced Small Cap ETF (FESM) employs multi-factor strategies focused on small-cap stocks with a growth tilt, which has contributed to its outperformance compared to the Russell 2000 and its peers [1] Group 1 - FESM is designed to follow multi-factor strategies specifically for small-cap stocks [1] - The fund's growth tilt has been a significant factor in its ability to outperform the Russell 2000 index [1]

Core Insights - Recent market conditions have made certain stocks, particularly dividend stocks, more attractive as they have pulled back from recent highs [1] - ETFs are a significant focus in investment strategies, with plans to allocate a larger portion of retirement contributions to them in 2026 [2] Small Cap Stocks - Small cap stocks are currently trading at their lowest valuations relative to large caps since the 1990s, with the Russell 2000 small-cap index averaging a price-to-book ratio of 2.0 compared to 5.2 for the S&P 500 [4] - Lower interest rates in 2026 could favor small cap outperformance, as smaller companies typically rely more on debt [5] Real Estate Investment Trusts (REITs) - The real estate sector has underperformed over the past decade, but there are attractive opportunities in REITs, with the Vanguard Real Estate ETF (VNQ) expected to perform well in 2026 [6] - VNQ offers a 4% dividend yield and provides exposure to major real estate operators like Prologis and Digital Realty Trust [8] Artificial Intelligence ETFs - The Ark Autonomous Technology & Robotics ETF (ARKQ) focuses on smaller AI stocks and is actively managed, with Tesla being the top holding [11][12] - This ETF allows investors to gain exposure to smaller AI companies without extensive research, making it an appealing option for those less familiar with the sector [13] Investment Strategy - The discussed ETFs represent different components of a diversified investment strategy, with a focus on long-term holdings and exposure to emerging sectors [13][14] - The three highlighted ETFs are considered particularly attractive as the market heads into 2026, with plans to add shares to portfolios soon [14]

Core Insights - Growth ETFs are positioned for significant growth, offering diversification and exposure to high-potential stocks, which can limit risk while capitalizing on growth opportunities [1][16] Group 1: Vanguard Russell 2000 ETF - The Vanguard Russell 2000 ETF contains 1,992 holdings, primarily small-cap stocks, which are defined as having a market capitalization of approximately $300 million to $2 billion, providing potential for explosive growth [3][4] - The ETF has achieved an average annual return of 9.18% over the last 10 years, suggesting that a $200 monthly investment could grow to around $209,000 after 25 years [6] - Approximately 20% of the fund is allocated to the industrials sector, ensuring diversification across various industries, which helps mitigate risk [5] Group 2: iShares Future AI and Tech ETF - The iShares Future AI and Tech ETF focuses on companies advancing AI technology, including software and infrastructure, with a total of 48 holdings, making it less diversified but highly targeted [7][8] - Despite its average return of 8.07% over the last five years, the ETF has seen a remarkable 33.77% return in the past 12 months, indicating potential for substantial growth in the AI sector [11] - The fund is considered riskier due to its smaller portfolio and the inherent volatility of the AI sector, as well as being a newer fund launched in 2018 [10] Group 3: Vanguard Information Technology ETF - The Vanguard Information Technology ETF includes 314 stocks from various technology sectors, with top holdings in major companies like Nvidia, Apple, and Microsoft [12][13] - This ETF has delivered a higher-than-average return of 22.18% per year over the last 10 years, suggesting that a $200 monthly investment could accumulate around $1.6 million after 25 years [15] - The ETF provides a balanced approach to tech exposure, focusing on large-cap stocks to help limit risk associated with the volatility of the tech sector [13]

Core Insights - Dlocal Ltd (NASDAQ:DLO) is recognized as one of the best small-cap stocks with significant potential, particularly favored by Reddit investors due to its management, revenue growth, and expanding total addressable market [1][2]. Financial Performance - In Q1 2024, Dlocal reported a 49% increase in payment volumes and a 34% rise in revenues, but gross profit only grew by 2% due to high processing costs [3]. - The company has been investing in scaling and enhancing its functionality, which has negatively impacted profitability [3]. Market Sentiment - Redditors express optimism about Dlocal's potential for increasing profit margins through cross-selling additional services, which could lead to a higher valuation multiple [2]. - Despite the current challenges, Dlocal is viewed as a leading payments processing company in emerging markets, with expectations for continued growth and improved profitability under strong management [3].