I was extremely bullish on small-cap stocks at the start of 2025, but the S&P 500 outperformed once again.As 2025 got underway, I wrote an article referring to the Vanguard Russell 2000 ETF (VTWO 0.57%) as one of the best investments for 2025 and beyond. At the time, the benchmark small-cap index was approaching correction territory, due to market turbulence that hit smaller companies hard.Well, the ETF delivered a total return of about 13% for the year, so it's not as if this was a disastrous call by any m ...

Core Insights - The article emphasizes the importance of including mid-cap stocks in investment portfolios alongside small-cap and international stocks [1] Group 1 - Mid-cap stocks are often overlooked but can provide significant growth opportunities [1] - Investors are encouraged to diversify their portfolios by adding mid-cap exposure to balance risk and return [1]

Core Insights - The article highlights the expertise of Dilantha De Silva, an equity analyst with over 10 years in the investment industry, focusing on small-cap healthcare stocks that are often overlooked by Wall Street analysts [1]. Group 1 - Dilantha De Silva has a significant following on Seeking Alpha and writes insightful articles for various investment platforms, showcasing his knowledge across multiple sectors [1]. - He is a CFA Level III candidate and holds qualifications from the Chartered Institute for Securities and Investment (CISI), indicating a strong professional background [1]. - Dilantha has been featured on major financial news outlets such as CNBC and Bloomberg, enhancing his credibility in the investment community [1]. Group 2 - The article does not provide any specific financial data or performance metrics related to the stocks mentioned, focusing instead on the analyst's background and expertise [1].

“...narrow breadth has long been a concern of market participants as a sign of a potential retreat in stocks. To the extent those same participants were short lagging names or sitting on the sidelines, the rotation caught them flat-footed. This is potentially bullish as improving breadth moves bears off the sidelines or short covering occurs among those playing the narrow breadth theme… the RUT all-time high combined with a multi-year high in short interest on its component stock is bullish, unless and unti ...

Investors have been loading up on small-cap stocks as they take a breather from the larger, possibly overvalued artificial intelligence (AI) names in recent weeks. ...

Core Insights - Small-cap ETFs are experiencing renewed investor interest after a period of outflows, indicating potential investment opportunities ahead [1][2] - The shift in investor sentiment is attributed to favorable monetary and fiscal conditions for smaller companies, with historical data showing small-caps outperform large-caps by 6% in the year following Federal Reserve rate cuts [3] - Valuation metrics indicate that small-caps are trading at a 12% discount to their pre-pandemic five-year average and are 36% below large-caps on a relative basis, suggesting a buying opportunity [4] Investment Themes - Active ETFs have seen significant growth, collecting a record $580 billion in 2025, while active mutual funds faced $640 billion in outflows [5] - Over the past decade, active ETFs have gained $1.2 trillion in assets, contrasting with active mutual funds that lost nearly $4 trillion [5] - In 2025, 47% of active fixed income managers outperformed their benchmarks, compared to only 32% of active equity managers, highlighting the stronger performance of fixed income [6] Diversification Trends - The case for diversification has strengthened, as multiple asset classes delivered positive returns in 2025, marking the first time since 2019 that stocks, bonds, and commodities all outperformed cash [7] - A notable 76% of countries in the MSCI ACWI index outperformed the U.S., the highest percentage since 2009, indicating a shift in global investment dynamics [7] - The SPDR Bridgewater All Weather ETF (ALLW) is highlighted as a diversification option, with significant trading volume exceeding $10 million in 12 of the last 13 days [8]

Key Points The "Magnificent Seven" stocks have all generated gains of at least 540% over the past decade. Their high valuations, however, have given investors some cause for concern. Small-cap stocks carry risk, but within a diverse exchange-traded fund, it is drastically reduced. 10 stocks we like better than iShares Trust - iShares Russell 2000 ETF › The "Magnificent Seven" stocks are the leading tech giants in the world, whose valuations eclipse more than $1 trillion in market cap today. Alpha ...

Technology stocks were all the rage last year... until September, when most of the big-cap AI-driven players saw share prices stall. The shift was quiet, yet painful. High-flyers like Nvidia and Palantir have made little progress since then, falling as the S&P 500 broadened to include the 493 stocks not in the so-called magnificent seven. The broadening beyond technology stocks has continued into January and is most evident in the eye-popping gains of the Russell 2000 small-cap index. While the S&P 500 i ...

Small-cap stocks are off to a roaring start in 2026, trouncing a sluggish S&P 500 while the Magnificent Seven are down so far this year. ...

Small-cap stocks have historically rewarded patient investors willing to endure volatility in exchange for growth potential. ...