Overview
- Vanguard’s Small‑Cap ETF (VB) has shown strong recent returns and large assets under management, and Vanguard data report a one‑year gain near 26% and about $77 billion in AUM.
- VB tracks the CRSP U.S. Small Cap Index, which targets roughly the 85th–98th percentile of U.S. market cap and gives the fund a higher median company size than Russell 2000 or S&P SmallCap 600.
- The ETF trades at a lower price/earnings multiple than Vanguard’s S&P 500 ETF, a gap of more than 20% that the coverage frames as a valuation discount for small caps.
- Analysts cited in the coverage expect small‑company earnings to accelerate, with forecasts showing slightly faster earnings growth for small caps in 2027, though the forecast sourcing is limited.
- Investors should weigh the potential for higher earnings and lower valuations against the facts that CRSP’s construction brings a larger‑median‑cap tilt and that small caps remain more cyclical and volatile than large caps.