Investment Profile: Small But Mighty

Everyone loves the underdog – in life, love, and even in business. Many companies overcome incredible odds to achieve success. Do you know how many multi-billion dollar companies started in a garage? JK Rowling received twelve rejection letters before Bloomsbury took a chance on a little wizard with a scar. Before Facebook reached a user base of 1.44 billion, it started with a few friends in a college dorm room. What do all of these stories have in common? They all started out small, but had mighty potential for growth.

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What is this investment all about?

Small but Mighty is officially called Vanguard Small-Cap ETF (VB). All of the companies in this investment are small-cap stocks, which means they’re the little guys. The current value of each company in this fund is less than $2 billion. That means that they are small, quick, nimble, and have room to grow. This fund has a very broad reach, spanning many industries such as consumer goods & services, financials, healthcare, industrials, oil & gas, and technology.

What companies does this investment include?

Small but Mighty (VB) includes over 1400 small companies that could be the next big thing. A few of them are household names, but many of them fly under the radar like JetBlue Airways Corp., which was ranked the highest in customer satisfaction in 2015. While Delta, Southwest, United, American, and Virgin America reported 2015 year-end losses, JetBlue stock reported over 30% growth.

Who is this investment for?

Small But Mighty might be for you if you root for the little guy. Buying into this investment means buying a little piece of potential. Choosing just one of these small-cap stocks may be a risky choice. If you choose the right one, there is a greater potential for growth. But there is also a greater risk of failure. Instead of putting all your eggs in one small basket, ‘Small But Mighty’ spreads out your investment into 1400 companies. This lowers your overall risk that any one company will negatively affect your portfolio but gives you the long-shot opportunity to ride a blockbuster success story all the way to the bank.

Why did it make the cut on Stash?

Take a look at the underlying fund. Small But Mighty (VB) is managed by Vanguard, one of the leading investment management companies in the world. Vanguard’s expense ratios are 82% less than the industry average. That means more money in your pocket. And lower cost doesn’t mean you have to sacrifice performance. Over the past decade, 92% of Vanguard managed funds outperformed their peer averages.







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