Small-cap stocks are public companies with market capitalizations of $300 million to $2 billion. Some of the companies in the small cap universe, or in small cap indexes, can have market caps that are much larger than this range at any given time due to the volatility of their share prices. Small-cap companies include Genworth Financial Inc. (GNW), Eastman Kodak Co. (KODK), and Rite Aid Corp. (RAD). Over the previous 12 months, small companies, as represented by the Russell 2000 Index, provided investors with a total return of 12.0 percent compared to the Russell 1000's 25.2 percent. This market performance information is as of January 6, 2022.

Small-cap stocks are shares of publicly traded companies with a relatively small market capitalization, typically ranging from $300 million to $2 billion. These companies are often in the early stages of growth and may offer significant potential for expansion and profit. Investing in small-cap stocks can be attractive due to their potential for higher returns compared to larger, more established companies. However, they also come with higher risks, including greater volatility and less liquidity. Small-cap stocks are usually less well-known and less covered by analysts, which can lead to under- or overvaluation. Investors in small-cap stocks often seek to capitalize on the growth potential of these companies before they become widely recognized and their valuations increase.