1 Overlooked Vanguard ETF Is Outpacing the S&P 500 This Year at a Bargain Cost
Yahoo Finance ·
Small-cap stocks are distinguishing themselves in big, positive ways this year. The two largest exchange-traded funds (ETFs) in the category are up an average of 21.4% year to date, easily outpacing the S&P 500 's 9.5% gains. Small-cap growth stocks are attendees of this party, leaving investors to wonder why the Vanguard Small-Cap Growth ETF ( VBK 0.46% ) isn't generating more buzz these days. To be sure, it's a bit of a stretch to call this ETF "overlooked," at least in broad terms. It's more than 22 years old, and with $23.8 billion in assets under management, it's the sixth-largest fund in the small-cap ETF camp. This high-flying Vanguard ETF is surprisingly overlooked. Image source: Getty Images. Add in some investors' affinity for high-octane equities, and it's arguably surprising this growth ETF isn't one of the belles of the 2026 small-cap ball. Notoriety or lack thereof aside, this Vanguard ETF is worth a place on long-term investors' small-cap shopping lists. One primary advantage of small-cap stocks is the potential for higher growth than in typical large-cap names. Obviously, smaller growth stocks can ratchet up that growth proposition.
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Small-cap ETFs have outperformed the S&P 500 this year, posting an average return of 21.4% compared to the index's 9.5% gain. Specifically, the Vanguard Small-Cap Growth ETF (VBK), with $23.8 billion in assets under management, remains underappreciated. Investors should consider portfolio diversification by focusing on small-cap growth stocks, which offer higher growth potential than large-cap stocks.
상승 영향
- Small-cap Stocks — They have achieved a strong 21.4% return this year, outperforming the S&P 500. ETFs like VBK offer an attractive alternative for long-term investors due to higher growth potential and efficient cost structures compared to large-caps.
하락 영향
- Large-cap Stocks — They are lagging behind the market this year due to a lack of relative growth momentum. As investment capital shifts toward high-growth small-caps, large-cap-centric portfolios may experience stagnant returns.
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Small-cap stocks are currently entering a cycle of recovery and growth as investors seek higher returns outside of the mega-cap tech bubble. Despite their robust performance, ETFs like VBK have not yet received significant retail inflows compared to major market indices, suggesting further room for upside potential.
Portfolio diversification into small-cap growth is essential for mitigating risk associated with heavy large-cap concentration, especially in an environment where interest rate pivots can disproportionately benefit smaller, high-growth companies.
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