The Best Small-Cap Funds to Buy in 2026

Investors gravitate to small-company stocks for various reasons. Some want a dose of small companies in their portfolios to round out their exposure to the large-company stocks that dominate the market. Others may want to tilt their portfolios toward small caps after a long period of large-cap outperformance. Although small-cap stocks are having a terrific 2026, they’ve still significantly lagged large-cap stocks during the past few years.

If you’re lighter in small-company exposure than you’d like, you can turn to our list of the best small-cap mutual funds and exchange-traded funds—those funds with at least one share class earning a Morningstar Analyst Rating of Gold—for ideas to investigate further.

The 29 Best Small-Cap Funds and ETFs to Buy for 2026

To find the best small-cap funds and ETFs to buy, we screened funds landing in one of Morningstar’s US small-cap stock categories that earned a Morningstar Medalist Rating of Gold with 100% analyst coverage. All data is as of July 17.

1. Avantis US Small Cap Equity Fund/ETF AVSCX AVSC
2. Avantis US Small Cap Value Fund/ETF AVUVX AVUV
3. DFA US Micro Cap Fund/ETF DFSCX DFMC
4. DFA US Small Cap Fund/ETF DFSTX DFAS
5. DFA US Small Cap Value Fund/ETF DFSVX DFSV
6. DFA US Targeted Value Fund/ETF DFFVX DFAT
7. Fidelity Advisor Small Cap Growth FIDGX
8. iShares Core S&P Small-Cap ETF IJR
9. iShares ESG Aware MSCI USA Small-Cap ETF ESML
10. iShares S&P Small-Cap 600 Growth ETF IJT
11. iShares S&P Small-Cap 600 Value ETF IJS
12. Janus Henderson Triton JSMGX
13. Janus Henderson Venture JVTIX
14. Loomis Sayles Small Cap Growth LSSIX
15. LSV Small Cap Value LSVQX
16. Schwab Fundamental US Small Company Index/ETF SFSNX FNDA
17. Schwab US Small-Cap ETF SCHA
18. State Street SPDR Portfolio S&P 600 Small Cap ETF SPSM
19. State Street SPDR S&P 600 Small Cap Growth ETF SLYG
20. State Street SPDR S&P 600 Small Cap Value ETF SLYV
21. T. Rowe Price Integrated US Small Growth Equity PRDSX
22. Vanguard S&P Small-Cap 600 Growth ETF VIOG
23. Vanguard S&P Small-Cap 600 Index/ETF VSMSX VIOO
24. Vanguard S&P Small-Cap 600 Value Index/ETF VSMVX VIOV
25. Vanguard Small-Cap Growth Index/ETF VISGX
    VBK
26. Vanguard Small-Cap Index/ETF VSCIX
    VB
27. Vanguard Small-Cap Value Index/ETF VISVX
    VBR
28. Vanguard Strategic Small-Cap Equity VSTCX
29. Vanguard Tax-Managed Small Cap VTMSX

You’ll find both index funds and active funds on our list of Gold-rated small-cap funds. You’ll also find that some funds and ETFs favor value stocks, others invest in growth stocks, and still others invest in a blend of the two strategies. Always refer to a fund’s analyst report to fully understand the fund’s approach to small-cap stock investing.

Small-Cap Fund FAQ

What Is a Small-Cap Stock Fund?

Small-cap funds typically invest in companies in the bottom 10% of the capitalization of the US equity market. Small-cap funds can invest in value stocks, growth stocks, or some combination of the two. Some small-cap ETFs and mutual funds are passive investments that track a particular small-cap-stock index while others are actively managed.

Are Small-Cap Stocks Good Investments Today?

Morningstar chief US market strategist Dave Sekera thinks small-cap stocks are good investments today. “Even after registering their best first-half performance in more than three decades and well outperforming the broad market, small-cap stocks remain the most undervalued part of the market,” he says.

Are Small-Cap Index Funds Better Than Small-Cap Active Funds?

Passive strategies have several things going for them. First, of course, is their cost advantage: All of our Gold-rated passive funds carry below-average expense ratios, which give them a lower hurdle to jump over to generate returns. Moreover, passive strategies tend to be more tax-efficient than active strategies, which is a benefit for investors in taxable accounts. Finally, passive strategies are less threatened by asset-growth or key-person risk than active strategies.

That being said, the small-cap part of the market is an area where some active managers have been able to add value versus their respective indexes.

Do I Need a Small-Cap Fund?

Before adding a small-cap fund to your portfolio mix, double-check that you don’t already have plenty of exposure to small-company stocks through your core stock fund holdings. For instance, total market index funds currently include a 9%-11% weighting in small-cap stocks. Morningstar’s portfolio tool can help you determine your portfolio’s current small-cap stake.

What Percentage of My Portfolio Should Be in Small-Cap Stocks?

“Small-cap stocks currently make up about 9% of the overall equity market, which is a reasonable target for the US stock portion of a portfolio,” says Morningstar portfolio strategist Amy Arnott.

How to Screen for More of the Best Small-Cap Funds and ETFs

Investors can use our Morningstar Investor Screener tool to find more top mutual funds and ETFs investing in smaller companies. Here’s how to get started and some possible filters to use.

Access the Prebuilt Screen. Visit Morningstar’s Small Cap Funds list. Click on the blue “Screen with Investor” button. The full list of all small-cap funds and ETFs will populate in the screener. From there, you can filter on other metrics that matter to you.

Medalist Rating (Overall): You can choose to filter the list by Medalist Rating, focusing on mutual funds and ETFs with our highest ratings of Gold, Silver, and Bronze.

Share Class Type: The small-cap funds list includes both mutual funds and ETFs. If you want to narrow the list to ETFs only, click on the Share Class Type drop-down box and select ETF. Or if you want to include mutual funds only, select mutual funds in the drop-down box.

Passive or Active Strategies Only: The small-cap funds list includes ETFs and funds practicing both active and passive strategies. If you want to focus only on passive strategies or active strategies, not both, click on the blue “Screen with Investor” button. In the pop-up box, select Basics, then Index Fund. Back in the left-hand navigation, choose either “Yes” or “No” in the Index Fund drop-down box, depending on whether you want to filter only on passive funds or only on active funds.

Using the “+ Filter” button, you can continue to further filter your list by expenses, branding name (think of that as an asset manager), and other factors.