Vanguard Forecasts Small-Cap Stocks Outperform Large-Caps Over 30 Years

The Vanguard Group released a research forecast projecting that U.S. small-cap stocks will outperform large-cap stocks over the next 30 years, with a potential annual advantage of as much as 2.6%.

As a primary vehicle for this strategy, the iShares Russell 2000 ETF holds nearly 2,000 small-cap companies. While the ETF trailed the S&P 500 over the last decade with a 9.75% annualized return, it has rebounded to 17.6% over the past three years.

Projections indicate that a monthly investment of $100 in the iShares Russell 2000 ETF could grow to $167,690 over 20 years if the recent 17.6% bull-case return persists, though the company notes such results are not guaranteed.