Even though the Russell 2000 Index finished its worst week since early January, Goldman Sachs sees opportunity in small-cap stocks. Greg Tuort, who runs the actively managed Goldman Sachs Small Cap Core Equity ETF (GSC), believes easing financial conditions should lead to growth for the group. But his view requires caution. “I think you have to pick small-cap stocks very carefully because things can go down tremendously,” he told CNBC’s “Fast Money” Thursday. The firm’s small-cap portfolio manager suggests looking inside benchmark small-cap indexes to identify high-quality stocks. Federal Signal Corp., SPX Technologies and Core & Main were his fund’s top holdings as of Friday, according to FactSet. “There are a lot of things in the Russell 2000 that you probably don’t want to own,” he said. “If you look at some of the companies that are not necessarily at the top of the benchmarks, there are quite a few unprofitable companies. But in the $2 billion to $5 billion range, there are some You can see that can turn things around on its own.” As of Friday’s market close, despite the losing week, the Russell 2000 is up nearly 2% year-to-date. Meanwhile, Goldman’s exchange-traded funds outperformed the index, rising nearly 8% over the same period. Tuorto argues that interest rate-sensitive groups are gearing up for a catch-up ahead of the Federal Reserve’s expected easing. “Other financial conditions have eased a bit, which is a tailwind for small caps as well. Also, a bit more clarity on interest rates will be a good tailwind for the group,” he said. Tuorto said the semiconductor industry, dominated by Nvidia in 2024, could soon become a testing ground for small-cap stocks. He cites Cohu and Onto Innovation as two of the top candidates in this space. “We think [they] “We can benefit from a big rebound in things like chips and high-bandwidth memory, which is similar to Nvidia’s growth. We need high-bandwidth memory to run our AI machines,” Tuorto said. Stated. He said his global stock market may continue to outperform due to strong consumer spending, and emphasized the strength of the management of Shake Shack restaurants and newly listed Cava. “Consumers have a wide range of choices in how they spend their money.” “We really like the theme of the restaurant, and Shake Shack and Cava are two of his companies that focus not only on the menu, but on loyalty, and are managed by a very efficient management team on the real estate side. “Managed.” of things. ”
Goldman Sachs sees ‘selective’ opportunities in small-cap stocks
