T. Rowe Price Small-Mid Cap ETF

TMSL

Market cap $2.67B

Small-cap stocks remain the cheapest corner of the U.S. market. That's true even after posting their best first-half performance in more than three decades, according to Morningstar's Q3 2026 stock market outlook.

The ETF three-year milestone is more than just an opportunity for firms to tout their funds or celebrate years of work. That marker has material consequences for current and future investors in a fund, opening up those strategies to new flows.

Beyond the Mega Caps: Advisors Eye Small- and Mid-Cap Strategies The strong run by the Nasdaq-100 and the S&P 500 the last few years has loaded portfolios with heavy concentration risk. As a tiny group of mega cap tech giants shapes the market, finding meaningful diversification has become a priority for advisors.

Concentration risk has emerged as a dominant threat to portfolios this year. Even as geopolitical tensions show signs of cooling under a potential U.S.-Iran deal, market crowding remains a top concern.

Small-cap stocks are drawing renewed attention from T. Rowe Price as the firm's 2026 midyear outlook signals a broad shift in market leadership away from the largest technology companies.

Small-cap stocks are the most attractively valued capitalization segment of the U.S. equity market right now, trading at a 17% discount to fair value, according to Morningstar's Q2 2026 US Stock Market Outlook. Key Takeaways Small-cap stocks are trading at a 17% discount to fair value, the deepest of any market segment.

In a notable milestone, T. Rowe Price now holds ten ETFs with $1 billion in AUM.

There has been a visible disparity between the performance of U.S. small-caps and U.S. large-caps so far this year. What hasn't been too visible is a lot of investor interest in the action.

In my former life as a mutual fund analyst, T. Rowe Price was always a staple of my research.

Concentration risk, geopolitical risk, the return of inflationary pressure amid rising debt — it's been a stressful year for investors already. Indeed, there are more negative stories than positive when it comes to investing.