Small-Caps Are Getting Big On Robinhood, With Popular ETFs Boiling Up Onto Year-End Top 100 List
Wall Street has sworn that small-caps are destined to wake from a years-long slumber, underscoring the massive opportunity after years of underperformance relative to their large-cap compatriots. And since the small cap-oriented Russell 2000 notched its first all-time high since 2021, Main Street seems to be seeing the opportunity too — with signs of asset cycling now seen on the world’s most popular investing platforms.
- According to research from Business As Usual, retail investors on Robinhood — one of the most popular investing platforms — have embraced small-cap and mid-cap ETFs in recent weeks.
- Four ETFs have climbed onto the broker-dealer’s “100 Most Popular” list, including the Vanguard Small-Cap Index and the Vanguard Russell 1000 Growth Index.
What else have investors picked up? In recent years, Robinhood investors’ abandonment of speculative fare — like SPACs and other unprofitable small-caps — for more tried-and-true index fund strategies has helped them become enormously successful. Today, 19 of the platform’s top 100 stocks are exchange-traded funds, reflecting efforts to usher investors toward more responsible investing strategies and retirement savings. It’s a massive departure from the past for its user base, which collectively lost over $54B — or ~36% of all the assets on the platform — in a dark and disappointing 2022.
