Better Buy: Vanguard Small Cap Growth ETF or iShares Russell 2000 Growth ETF?
If you look at the performance of small-cap stocks over the past few years, the returns pale in comparison to those of large-cap stocks. Over the last five years, the Russell 2000 has a total return of about 39% while the S&P 500 is up about 65% over that same period.
But historically, small caps have performed better than large caps coming out of recessions. In each of the last four recessions -- 1981, 1990, 2001, and 2007 -- small caps have beaten large caps in both one-year and three-year annualized returns after the recessions, according to an analysis by Invesco. The only exception was the three-year return out of the 1981 recession.
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Source Fool.com
