Stock picking small caps may boost performance right now

Stock picking is crucial for exposure to small caps, according to Rob Harvey of the Dimensional U.S. Small Cap ETF. By actively managing the fund and avoiding underperforming small caps, investors can boost returns. The Russell 2000, which tracks small caps, has seen a 12% increase this year, while the S&P 500 is up 23%. The fund’s top holdings include companies like Sprouts Farmers Market and Abercrombie & Fitch, with cash and cash equivalents as the top holding. Investors are increasingly interested in actively managed products to filter out small cap laggards, as shown by shifting sentiment and investment flows. As of now, the Dimensional U.S. Small Cap ETF is slightly underperforming the Russell 2000.