Small caps woke up: is the rally finally broadening?

**SPEAKER_1** (0:01)
This is InvestTalk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero.

**SPEAKER_2** (0:15)
InvestTalk is made possible by KPP Financial, a registered investment advisor firm serving clients throughout the United States. Here is KPP Financial Portfolio Manager, Luke Guerrero.

**Luke Guerrero** (0:33)
Hey there everybody and welcome back to InvestTalk. I'm your host, Luke Guerrero. Today's Wednesday, August 19th, 2026
As always, we got a great show planned for you today. We got plenty of financial news to talk about. We got a recap of what went on in the market today, and of course, bring you stories that matter and answer your finance and investment questions. To that end, before we talk about today's show topics and the market today, let's tackle this caller question now.

**Steve** (1:08)
Hi, Justin and Luke. This is Steve calling from Missouri. Love your show. I'm interested in the Vanguard Morningstar Mid-Cap Value Index Fund, FNVAX is the ticker symbol. Thank you.

**Luke Guerrero** (1:23)
Well, Steve, the Vanguard Mid-Cap Value Index Fund is actually Vmvax, V-M-V-A-X, not F-M-V-A-X. And what it does is it seeks to track the Crisp US Mid-Cap Value Index. Like any Vanguard fund, it has a low expense ratio. It looks like the expense ratio of this guy is about seven basis points is what I'm seeing here.
Let's take a look real quick. Yeah, about seven basis points on this guy right now. Now, it has just under 200 holdings, pretty broadly diversified in the way that it attacks the market here. And it's got some familiar names at the top of your marathon. Petroleum, Valero, Energy, Phillips. It has actually pretty decent energy weight to it, just because it is within the mid-cap space.
We talk about a lot about value investing, about the size premium, and in a lot of ways, the mid-cap area is a bit of a sweet spot between risk and return. It's big enough to be stable, but it's small enough to still grow. And this one has done pretty well this year. I mean, it's up quite a bit, year to date. It's up about 19.01%.
And that's because value has just been outperforming growth in 2026 And historically, mid-caps, they tend to outperform large caps, and small caps do very well, as well as mid-caps over longer periods of time. So this is the type of fund you'd wanna get into to tilt towards those areas that historically have shown higher expected returns over the long run. Especially when you consider the PDE here is like 15, 16 within this fund relative to the S&Ps, like 20 to 22 of the past couple months. So I think if you're trying to get mid-cap value exposure, you're trying to do it in a market cap weighted, broadly diversified way. Just like many other Vanguard funds, not a better way to do it. That is Vmvax, the Vanguard Morningstar Mid-Cap Value Index Fund. Thanks for the call. We had a great show yesterday. Justin talked about the trillion-dollar interest bill that nobody votes on, because the government's own borrowing costs now shape monetary policy. That means a lot for long-dated bonds and why central banks around the world have been buying gold at the fastest pace in years. He also answered a question on Chevron Corporation, Tigger CVX. If you'd like to hear that answer or hear more about that story, I encourage you to check out yesterday's episode of InvestTalk. Remember, the best way to never miss an episode is to subscribe wherever you get your podcasts. All right, on to today where we have a pretty important focus point with respect to how the market has been moving. Because small caps have really woken up and a lot of people are asking, is the rally that we've seen finally broadening? We saw the Russell 2000 set a fresh record close last week, even as large caps struggled. So we'll look into the leadership rotation, what it historically signals, and how investors should think about size exposure without chasing what has been a multi-week move.
We'll also touch on the latest report from the Fed on household debt and what it's actually showing. Talk a little bit about housing insurance and how housing coverage costs are now starting to rival. People's mortgage payments month over month. And should we have time at the end of the show? A bit of a discussion on the cost of living adjustment for social security and what that means for anybody who is drawing it in retirement or will be drawing it soon. We also have some voice bank calls ready to play, including one on owning physical gold versus gold stocks. Another question on Apple, ticker AAPL, and as always, questions that came in from the comments section of the InvestTalk YouTube channel.