The Russell 2000 is at all-time highs.

At its January 2026 peak, the index was up 8%, meaning small-cap stocks were on pace for their strongest start to a year in nearly four decades. This surge is being fueled by a combination of improving earnings expectations, the prospect of additional interest rate cuts, and ongoing signs of strength in the U.S. economy.

Small-cap stocks are particularly sensitive to shifts in economic conditions and Federal Reserve policy. As CNBC recently noted, these companies tend to generate more of their revenue domestically, making them more responsive to U.S. growth trends.

History also favors small caps in easing-rate environments. Because many smaller companies rely more heavily on debt financing, lower interest rates can significantly reduce borrowing costs and improve access to capital. That dynamic can translate into stronger balance sheets and improved profitability. For these reasons, many investors view small caps as among the biggest potential beneficiaries of future rate cuts.

With that backdrop in mind, here are three small-cap ETFs worth considering:

Vanguard Small-Cap ETF (VB)