The small-cap equities world carries a number of risks—unproven companies, higher volatility, and so on—but also brings the opportunity for growth that may outpace some larger names. International small-cap names may be heating up, and while small-cap stocks in the United States have already had a good run, many valuations remain comparably attractive when held up against mega-cap tech stocks and other top names. A big factor is the interest rate environment: investors predicting that the Fed might hold rates steady or even lower them at some point in the foreseeable future might want to stock up on small-cap names to buy and hold before that time.
One of the easiest and best ways to do so is through dedicated small-cap stock exchange-traded funds (ETFs). Fortunately, there are many different options, each providing a slightly different strategy to build diversification into the small-cap space, whether you're looking for a modest allocation or a more significant lean-in.
