This Unstoppable Vanguard ETF Is Beating the S&P 500 and the Nasdaq-100 in 2026, but It Could Face a Reckoning Next Week
The Federal Reserve could disrupt the blistering rally in American small-cap stocks.
Overview
The diversified S&P 500 (SNPINDEX: ^GSPC) and the technology-heavy Nasdaq-100 are two widely followed stock market indexes that are packed with America's highest-quality companies. They have returned 12.7% and 17% respectively so far in 2026, as of the market close last Friday, Sept. 4.
But then there is the Russell 2000 index, which is sitting on an even better year-to-date gain of 20.2%. It tracks the performance of approximately 2,000 of America's smallest listed companies, and since many of them generate most of their revenue domestically, they are more insulated from headwinds like the ongoing conflict in the Middle East compared to larger, multinational companies.
Details
The Vanguard Russell 2000 ETF (NASDAQ: VTWO) is an exchange-traded fund (ETF) that mimics the Russell 2000. It could face a reckoning on Sept. 15 and 16, when the U.S. Federal Reserve holds its next policy meeting. The odds of an interest rate hike are increasing, and for reasons I'll soon explain, small American companies tend to be more sensitive to such policy adjustments than their larger counterparts.
Source
Originally published at www.fool.com.