3 Reasons Small-Cap Stocks Could Outperform in 2026 -- and 1 Fund to Buy Now

Small-cap stocks, or publicly traded companies valued anywhere from $300 million to $2 billion, lagged the broader markets in 2025. The Russell 2000, which tracks the performance of 2,000 small-cap stocks, returned 12% over the last year compared to the S&P 500's 17% rise. While not a huge gap, the underperformance is part of an ongoing 15-year streak of small caps trailing large-cap companies.Yet, this 15-year run is an historical anomaly. It's been well documented that small caps have outperformed large caps over the last century, beating them by an average of 2.85% a year since 1927. And for every 10-year investing window, small caps beat large caps two-thirds of the time.For context, the S&P 500's average annual gain of 10.37% since 1927 would have turned $100 into a whopping $1.75 million with dividends reinvested. But when you tack on the extra 2.85% in average annual outperformance that small caps enjoyed, the figure swells to $21.8 million.   Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool