Goldman Sachs is betting on the small cap rally. Here’s how.

Finance

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Small cap stocks are undergoing a resurgence, and Goldman Sachs Asset Management is looking to capitalize on it through the exchange-traded fund space.

“In the last five weeks, we’ve launched three new active products. Two are the premium income. One, believe it or not, is small cap core,” Brendan McCarthy, the firm’s managing director of exchange traded funds, told CNBC’s “ETF Edge” on Monday. “This is our first active small cap ETF, and that’s very much on the back of investor demand.”

It’s called the Goldman Sachs Small Cap Core Equity ETF and it’s up almost 8% since its early October launch date. Meanwhile, the Russell 2000, which tracks small cap stocks, is up more than 7% in that same time frame as of Tuesday’s market close.

According to the fund’s website, top holdings include Federal Signal Corp, Meritage Homes and Onto Innovation.

Despite recent appetite for small caps, the Russell 2000 is still underperforming the broader S&P 500 index by about 13% so far this year.

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