Everyone on Wall Street is watching Nvidia, Apple, and the artificial intelligence (AI) trade.
It’s understandable, given that the “Magnificent Seven” stocks have generated huge returns over the past three years
The part that few people are paying attention to right now, though, is the other end of the market cap spectrum. Small caps and the Vanguard Small-Cap ETF (NYSEMKT: VB) have become legitimately attractive investment options right now. This fund is up 25.5% over the past year, beating the 22.7% return of the Vanguard S&P 500 ETF over the same period, even as large-cap tech is roaring.
The improving earnings outlook for this segment, along with comparatively attractive valuations, makes this a strong buy candidate over the next several months. How the Vanguard Small-Cap ETF is constructed This fund tracks the CRSP U.S. Small Cap Index, which covers roughly the 85th to 98th percentile of U.S. market cap.