VUG vs. IWO: Can This Small-Cap ETF Keep Outperforming Major Growth Stocks?
Cheap valuations could make small-cap growth stocks a strong choice for the next several years.
Overview
Which stocks do you think are delivering the biggest gains right now: the major tech stocks that are driving the artificial intelligence (AI) boom, or smaller companies that most people might not know by name? The answer might surprise you: Small-cap stocks have been on a hot streak.
The Vanguard Growth ETF (NYSEMKT: VUG) focuses on large-cap growth stocks. Its portfolio is heavily weighted toward the tech sector and household-name tech companies. Although this fund has a strong track record, in the past year it's been strongly outperformed by the iShares Russell 2000 Growth ETF (NYSEMKT: IWO), which holds more than 1,100 small-cap growth stocks.
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Originally published at www.fool.com.