The article discusses the importance of stock picking in gaining exposure to small caps and highlights the strategy employed by Rob Harvey of Dimensional U.S. Small Cap ETF to avoid underperforming companies. It also mentions the performance of the Russell 2000 index compared to the S&P 500, as well as the top holdings of the Dimensional U.S. Small Cap ETF, which include Sprouts Farmers Market, Abercrombie & Fitch, and Fabrinet.
Three key highlights:
1. Rob Harvey emphasizes the significance of removing underperforming small caps to boost returns.
2. The Russell 2000 index, tracking small caps, has shown a 12% increase this year, while the S&P 500 has risen by about 23%.
3. Investors are seeking actively managed products like the Dimensional U.S. Small Cap ETF to filter out small cap laggards.
In summary, the article sheds light on the benefits of strategic stock picking in small cap investments and provides insights into the performance of small cap indices compared to broader market indices. It also underlines the significance of actively managed products in the current investment landscape.
Editorial content by Sierra Knightley
