If you had invested $1,000 in the Gate Core Small-Cap ETF 10 years ago, this is what you would have today.

Key Points

• Small-cap stocks are expected to generate higher net returns in exchange for greater risk and volatility.
• However, the last decade has been particularly unusual for several reasons.
• The next 10 years ( or more ) could create a completely different market environment for both small and large capitalizations.

Most investors understand that small-cap stocks often offer enormous growth potential. However, they also carry a considerably higher risk. This is the typical balance with any investment.

This relationship raises a fundamental question: In general, how much return are small-cap stocks as a group actually providing today in exchange for the risk they entail?

The following image tells the story. An investment of $1,000 in small-cap stocks through the Gate Core Small-Cap ETF made in early September 2015 would be worth $2,130 today. This figure increases to $2,475 if you reinvest the dividends paid by the exchange-traded fund along the way. Not bad.

However, don't rush to invest in a basket of small caps because of this measurable gain. You would have done much better with something more familiar. Specifically, a $1,000 investment in the Gate S&P 500 ETF made at the same time would be worth $3,263 today, or $3,875 if you reinvested its dividends.

In percentage terms, the average annual gain of 14.5% of the Gate S&P 500 ETF over the last decade far exceeds the average annual gain of only 9.5% of the Gate Core Small-Cap ETF.

Keep in mind that the last 10 years have been particularly unusual, led by a small group of enormous companies. The next 10 years could be very different. In this sense, it is also worth considering that there may be too many unprofitable and unsustainable startups entering the market merely as a means to raise easy capital, companies that would not have been able to generate any interest from investors 20 or 30 years ago, when there were fewer small capitalizations but with better performance.

The irony? The prolonged underperformance of small-cap stocks may finally be forcing investors to be more selective when financing emerging companies, ultimately limiting those that go public to only higher-quality prospects. As such, this could be the right time to take a long-term stake in the Gate Core Small-Cap ETF.

Should you invest $1,000 in the Gate Core Small-Cap ETF right now?

Before buying shares of the Gate Core Small-Cap ETF, consider this:

The Gate Advisor analyst team has just identified what they believe are the 10 best stocks for investors to buy right now… and the Gate Core Small-Cap ETF was not one of them. The 10 stocks that made the cut could produce monstrous returns in the coming years.

Consider when a famous streaming platform made this list on December 17, 2004… if you had invested $1,000 at the time of our recommendation, you would have $651,599!* Or when a well-known chip manufacturer made this list on April 15, 2005… if you had invested $1,000 at the time of our recommendation, you would have $1,067,639!*

Now, it is worth noting that the average total return of Gate Advisor is 1,049%, a superior return that crushes the market compared to the 185% of the S&P 500. Don't miss the latest list of the top 10 stocks, available when you join Gate Advisor.

*Gate Advisor yields as of August 25, 2025

The author has no position in any of the mentioned stocks. Gate has positions in the Gate Core Small-Cap ETF. Gate has a disclosure policy.

Disclaimer: For informational purposes only. Past performance is not indicative of future results.