How This Small-Cap ETF Can Play a Role in a Diversified Strategy

Outside a few brief stretches, small caps have consistently underperformed large caps for more than a decade. Fueled by low interest rates, trillions of dollars of stimulus payments, and a general dominance by megacap tech stocks, small caps had been unable to gain any consistent traction.That has changed in 2026. A major market rotation away from tech has ignited a rebound in small caps from investors looking for better value and momentum. Many portfolios are and have been overweight artificial intelligence (AI) stocks and the "Magnificent Seven." This year, however, has shown that diversification still matters. Risk management still matters. And funds, such as the iShares Core S&P Small Cap ETF (NYSEMKT: IJR), may improve risk-adjusted returns over time.Image source: Getty Images.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool