By laksh5382 
Stock picking can be important to get exposure to small caps.
Rob Harvey, who’s behind it Dimensional US Small Cap ETFUses an actively managed approach to group buying. He is trying to avoid small caps that are performing poorly and dragging the index down.
“There’s no reason to hold back companies that are really hitting the bottom line in terms of profitability,” the company’s co-head of product specialists told CNBC.ETF Edge“This week. “You remove them from your small cap world, [and] There’s a lot you can do to increase returns.”
Russell 2000The small-cap tracker has gained more than 12% so far this year. Meanwhile, wider S&P 500 That’s an increase of about 23% in the same time frame.
As of Thursday, the fund’s top holdings were Sprouts Farmers Market, Abercrombie & Fitch, fabricnetAccording to Dimensional Fund Advisors website. However, its top holding is cash and cash equivalents, which is 1.13% of the fund.
Ben Slavin, who is global head of ETFs for BNY Mellon, says investors are looking for more actively managed products to avoid being left behind in small caps.
“Investor sentiment has shifted toward small caps, and from a flow standpoint, you can see it in the numbers, where investors are placing their dollars,” Slavin said. “These types of strategies are paying off.”
As of Friday’s close, the Dimensional US Small Cap ETF has underperformed the Russell 2000 by more than a percent this year.