As of July 20, the Russell 2000 index, often referred to as the small-cap index, is up approximately 18% in 2026. That’s about double the gains of the S&P 500 and evidence of the sector rotation in the market. The idea is that many investors who are looking for alternatives to technology stocks and their frothy valuations are turning to small-cap stocks that have sold off sharply.
It’s not exactly a growth-versus-value play. Small-cap stocks often lag the market for good reasons. In many cases, the companies are not profitable and may have little revenue. But that’s not always the case, which is where the opportunity may lie.
