Mega-cap stocks are everything, right? Wrong. Small-cap exchange-traded funds (ETFs) like the iShares Russell 2000 iShares ETF (IWM) are the way to bust out of what’s working, and into what’s hot, right? Also wrong. I think the remainder of 2026, if it provides any monster upside, might just come from the smallest stocks. I mean, the very smallest stocks.
There are two I’ve followed over time. One is the Micro-Cap iShares ETF (IWC), which owns 1,300 stocks and is part of my ROAR 10 ETF model portfolio, which I’ve discussed here. But I want to give equal time to its top peer, the First Trust Dow Jones Select MicroCap Index Fund ETF (FDM).
