VB: Bottom-Up And Top-Down Analysis Points To Further Outperformance
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Ivo Kolchev1.58K FollowersFollow5ShareSavePlay(9min)CommentsSummaryThe Vanguard Small-Cap Index Fund is off to a strong start in 2026, outperforming large-cap peers constituting the S&P 500.Even after recent gains, VB holdings trade at a circa 20% discount relative to larger peers.VB holdings should also see outsized benefits from above-trend U.S. GDP growth and incremental Fed rate cuts once Kevin Warsh succeeds chair Powell.While dividend growth is likely to tick down from the pace observed over the past few years, I expect it to outpace dividend growth delivered over the past decade.Downside surprises in U.S. GDP growth, fewer Fed rate cuts, and political maneuvering ahead of the midterms are key risks in the investment case. Vladimir Zakharov/iStock via Getty Images Introduction After a challenging 2025 characterized by elevated economic uncertainty, U.S. small cap stocks are off to a strong start in 2026, benefiting from materially lower valuations relative to larger peers, as well as expectations for strong U.S. GDPThis article was written byIvo Kolchev1.58K FollowersFollowI ventured into investing in high school in 2011, mainly in REITs, preferred stocks, and high-yield bonds, starting a fascination with markets and the economy that has not faded despite the years. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental long-term point of view.
On Seeking Alpha I mostly cover REITs and financials, with occasional articles on ETFs and other stocks driven by a macro trade idea.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.