Prediction: This Lesser-Known Growth ETF Will Crush the S&P 500 Over the Next 20 Years
Small-cap growth stocks might beat the biggest names on Wall Street for decades to come.
Overview
Are we in a stock market bubble? That's the biggest question on the minds of many investors. And when people say, "the stock market," they usually mean the S&P 500 index (SNPINDEX: ^GSPC). The S&P 500 is up about 12% year to date. But some investors worry that metrics like the Shiller CAPE ratio are pointing to a bear market ahead.
If you fear that the S&P 500 is overvalued and highly concentrated, if you're worried that the artificial intelligence (AI) boom won't pay off for the mega-cap tech companies that are investing heavily in AI data centers and semiconductors, then you might want to bet on the little guys.
Details
That's right: small-cap stocks might be a better buy than the S&P 500 for the next 20 years. Vanguard's recent market forecast estimates that U.S. small-cap stocks will outperform U.S. large-caps for the next 10 years and the next 30 years. The Vanguard forecast projects an expected average annual return of 5.1% to 7.1% for small-caps for the next 30 years, compared to a range of 4.6% to 6.6% annualized return for large-caps.
Source
Originally published at www.fool.com.