Rally in small caps just starting: VettaFi’s Rosenbluth suggests [Video]

Small caps just had their first historic week in three years, and one exchange-traded fund expert predicts the group’s record highs will help drive investors back into the group.

“Small caps are going to become more in favor in 2025,” VettaFi’s Todd Rosenbluth said on CNBC’s “ETF Edge” this week. “They started to perk up since the election and heading into the election as interest rates have been coming down.”

Rosenbluth, the firm’s head of research, expects ETF funds specializing in small caps to reap the benefits of investors looking to broaden out their market exposure.

The Russell 2000, which tracks small-cap stocks, hit its first record high since November 2021 this week and just saw its best monthly performance since last December. The index is up almost 11% in November and 35% over the past 52 weeks as of Friday’s close.

Rosenbluth suggests some profit taking in the “Magnificent Seven” stocks, …