It’s Friday. Time to give you a stock pick from our sister newsletter, The Spill, so you can think about it over the weekend and maybe make a move Monday morning. While The Juice helps you be better with money across the board, The Spill focuses on stocks financial pros are researching and judges how good of buys they are. If you’re already sold, you can sign up for The Spill – for free – here.
Proprietary Data Insights
Financial Pros’ Top Small-Cap Growth ETF Searches in the Last Month
Finance Pros Are Getting Hot on This Sector Again
Historically, investors looked to small-cap stocks for growth.
Big tech changed that over the last decade. But with heavyweights including Meta and Google cutting back on staff and expenses, financial pros have shifted their focus back to small businesses.
As we researched small-cap ETFs, we found an unusual trend. While financial pros don’t typically search for small-cap growth tickers, our proprietary Trackstar database showed a slow but steady increase over the last month.
That’s why we picked their top search in this category – the Vanguard Small-Cap Growth ETF (VBK) – for today’s newsletter.
And don’t let the low search numbers fool you. Many financial pros search tickers outside the office, counting toward our retail segment, which searched for VBK 484 times.
Key Facts About VBK
VBK tracks the CRSP U.S. Small Cap Growth Index, which uses multiple factors to select and weigh stocks that rank between the 85th and 98th percentiles by market cap.
The ETF’s top 10 holdings highlight its fairly even investment distribution:
VBK has delivered solid returns over its lifetime, even beating the benchmark index a bit.
The table below shows VBK’s average annual returns, including dividends, over multiple periods.
In five years, the ETF has returned 34.4%, while it’s done even better over the last three years, up 44.6%.
With different methodologies for small-cap growth selection, each of the following competitors offers a slightly different portfolio using a similar approach.
VBK is known for its low expense ratio, the lowest in the group. Plus, it’s the largest fund of the bunch.
While its dividend yield isn’t great, it’s the top performer over a five-year period, save for the one mid-cap fund.
Our Opinion 8/10
VBK is the best small-cap growth index of the group.
But small-caps haven’t held up as well as other asset classes, which is why we dropped our rating to an 8/10.
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