Unlock Wealth: 5 Small-Cap ETFs That Could DOUBLE Your Money This Year! Don't Miss Out!

Investors are currently witnessing a remarkable surge in small-cap stocks. The Morningstar US Small Cap Index has outperformed both the Morningstar US Large Cap Index and the broader Morningstar US Market Index by a significant margin over recent months. This trend raises an important question: Can the revival of small-cap stocks continue into 2026?

According to Dave Sekera, Chief US Market Strategist at Morningstar, the answer is optimistic. “According to our valuations, we think they have further to run,” he stated. Sekera points out that the economic landscape is favorable for small-cap stocks, with projections of at least two further cuts to the fed-funds rate this year and a continued decline in long-term interest rates. Additionally, he notes that the ongoing AI buildout boom has catalyzed faster-than-expected economic growth. Historically, small-cap stocks thrive when the Federal Reserve is easing monetary policy, when long-term interest rates are falling, and when economic growth is reaccelerating.

For investors looking to capitalize on this small-cap revival but hesitant to pick individual stocks, there are numerous exchange-traded funds (ETFs) available. Investing in ETFs that encompass both growth and value characteristics allows investors to benefit from the positive momentum of smaller companies, regardless of which investment style leads the market.

The 9 Best ETFs for the Small-Cap Stock Rally in 2026

To identify the best ETFs for this small-cap stock rally, we focused on those that have received a Morningstar Medalist Rating of Silver or Gold, with 100% analyst coverage. Each ETF listed falls into the small-blend Morningstar Category and boasts at least $100 million in assets. Here are the top nine options:

1. Dimensional US Small Cap ETF (DFAS)
2. Invesco RAFI US 1500 Small-Mid ETF (PRFZ)
3. Schwab Fundamental US Small Company ETF (FNDA)
4. Schwab US Small-Cap ETF (SCHA)
5. State Street SPDR Portfolio S&P 600 Small Cap ETF (SPSM)
6. Vanguard S&P Small-Cap 600 ETF (VIOO)
7. Vanguard Small Cap ETF (VB)
8. iShares Core S&P Small-Cap ETF (IJR)
9. iShares ESG Aware MSCI USA Small-Cap ETF (ESML)

While all these ETFs belong to the same category, they employ different strategies, which can lead to varied performance outcomes. Therefore, investors should conduct their due diligence to understand the specific holdings of each fund before making any investment decisions.

Here’s a brief overview of some of the standout ETFs for this small-cap stock rally:

Dimensional US Small Cap ETF

• Index Fund: No
• Morningstar Medalist Rating: Gold
• Prospectus Net Expense Ratio: 0.27%

"DFA US Small Cap and Dimensional US Small Company use a quantitative strategy that provides diversified access to profitable small-cap US stocks," explains analyst Zachary Evens. This approach is particularly advantageous in a notoriously volatile market segment, as it targets the smallest 10% of US equities that meet certain investability criteria while excluding less stable options.

Invesco RAFI US 1500 Small-Mid ETF

• Index Fund: Yes
• Morningstar Medalist Rating: Silver
• Prospectus Net Expense Ratio: 0.34%

This fund offers a contrarian strategy that separates price from weight, focusing on fundamental measures of value and size. It has shown resilience, outperforming its benchmark since its inception in 2006, particularly during recovery periods following economic downturns.

Schwab US Small-Cap ETF

• Index Fund: Yes
• Morningstar Medalist Rating: Silver
• Prospectus Net Expense Ratio: 0.04%

This ETF targets approximately 1,700 small- and micro-cap US stocks. With a low expense ratio and a diversified portfolio, Schwab US Small-Cap ETF effectively minimizes stock-specific risk, making it a compelling choice for investors.

The small-cap market typically experiences higher volatility than large-cap markets, but this volatility can also lead to significant upside potential. Investing in small-cap stocks, particularly through ETFs, allows for diversification across a broad selection of smaller firms, spreading risk while enabling investors to capture potential growth.

As the economic landscape evolves, staying attuned to market shifts and identifying the right investment vehicles will be crucial for those looking to leverage the momentum in small-cap stocks. The ETFs listed here not only provide a range of options for different investment strategies but also demonstrate strong ratings from Morningstar, making them worthy considerations for any investor’s portfolio.