‘Small caps are going to become more in favor in 2025:’ VettaFi’s research head doubles down on winning group
Published On Nov 30, 2024, 11:00 AM
According to Todd Rosenbluth from VettaFi, small-cap stocks are poised for a comeback as they have shown significant gains recently, with the Russell 2000 index reaching its highest point since November 2021. Rosenbluth expects this trend to continue into 2025 as interest rates decrease and investors shift their focus from large-cap giants like the Magnificent Seven stocks to small-cap investments. He recommends looking into small-cap ETFs, particularly the iShares Core S&P Small-Cap ETF (IJR) and the VictoryShares Small Cap Free Cash Flow ETF, both of which have performed well recently.
Stock Forecasts
IJR
Positive
Small-cap stocks have seen a resurgence and are likely to attract more investor interest in the coming year as part of a broader market shift. The easing of interest rates supports this trend, making small-cap ETFs appealing options for diversifying portfolios.
VIOV
Positive
Investors are likely to rotate out of large-cap stocks and money market accounts into small-cap equities to seek higher returns, benefiting those ETFs focusing on small-cap stocks.