Vanguard Small-Cap ETF

VB

Market cap $73.1B

Small caps jump early in 2026, reviving the January Effect. ETFs like VTWO offer diversified exposure to potential seasonal and macro-driven gains.

S&P 500 momentum and retail inflows set the stage for a potential 2026 rally, with ETFs offering ways to ride the bullish trend.

ISCB charges a slightly lower expense ratio than VB, but both are extremely low-cost small-cap ETFs. ISCB posted a higher one-year return, though VB has performed better over the long haul, with ISCB also showing a marginally deeper drawdown.

Softer inflation and dovish signals point to more 2026 rate cuts. These ETFs can help investors ride potential gains.

Coming into 2025, amid a debate about concentration and lofty valuations in the largest of large-cap stocks, as well as concerns about macro uncertainty and economic conditions, we collectively called for diversification. That diversification, among other things, singled out the opportunity in small-caps.

The S&P 500 includes large-cap stocks and excludes mid-cap and small-cap stocks. Vanguard's mid- and small-cap ETFs have lower valuations than their S&P 500 counterpart.

Vanguard Small Cap ETF (VB) is rated a buy, supported by attractive valuation, solid fundamentals, and a constructive long-term technical setup. VB has outperformed IJR and IWM but lagged SPY and VSS, highlighting mixed relative performance among small-cap benchmarks. Despite high volatility and macro risks, VB's 16.2x P/E, 1.5x PEG, and balanced value-growth mix offer compelling diversification.

Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the Vanguard Small-Cap ETF (VB), a passively managed exchange traded fund launched on January 26, 2004.

And what to look for when shopping for one.

Whether you've been investing for years or are simply starting out, buying exchange-traded funds (ETFs) can be a smart way to diversify your portfolio and invest in the best stocks in the market.