Small-Cap Premium Hasn't Beat Large Caps in 15 Years

The iShares Russell 2000 ETF (IWM) has returned 490% since the Vanguard S&P 500 ETF (VOO) launched in 2010 with an 830% gain. Approximately 40% of Russell 2000 components are currently unprofitable, impacting small-cap stock performance amid rising interest rates. However, small-cap earnings are projected to grow by 18% in both 2026 and 2027, which may exceed the S&P 500's earnings growth for the first time in years. This shift in earnings growth expectations could interest investors considering small-cap stocks as a potential opportunity.