Small-company stocks are more popular than a pumpkin spiced latte in fall. The Morningstar US Small Cap Index is up about 22.7% for the trailing 12-month period as of this writing. That's nearly 2.5 percentage points ahead of the large cap index during the same time frame.
Market watchers suggest that small companies are edging out larger names because they're less vulnerable to trade-war talk: As a group, smaller domestic companies are less reliant on exports than their larger-cap counterparts. Others, meanwhile, argue that smaller companies may benefit more from last year’s tax cuts--hence the attraction.
Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.