Lazard’s global head of small-cap equity, Sean Gallagher, predicts a significant rally in small-cap stocks, fueled by declining interest rates and attractive valuations. He expects the iShares Russell 2000 ETF (IWM) to surge between 30% and 50% in the next year, closing the gap with large-cap counterparts. Gallagher’s bullish outlook is supported by the substantial valuation gap between small and large caps, with small caps appearing exceptionally cheap after removing non-earners from the index.