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‌

8/18/2026

Everyone Sees the Small Cap Rally. Almost No One Is Buying It

U.S. small caps returned 22.93% in the first half of 2026, outpacing large caps at 9.55% by the widest margin in history for that stretch. It is the kind of number that normally sends investors scrambling to add exposure. Yet the flow of capital into small-cap funds tells a different story, one that raises an obvious question: if small caps are winning this decisively, why hasn’t the money followed?

3 min read