The article was published in the August issue of Morningstar ETF Investor. Download a complimentary copy of ETF Investor by visiting the website.
U.S. small-cap stocks have provided wonderful returns since the turn of the millennium. From January 2001 through June 2017 the MSCI USA Small-Cap Index rewarded investors with a 3.9% annualized excess return over the standard MSCI USA Index, albeit with greater volatility. Thus the risk/reward relationship, as expressed through annualized returns and standard deviations, held up fairly well.
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Daniel Sotiroff has a position in the following securities mentioned above: SCHB. Find out about Morningstar’s editorial policies.