Finance

Stock picking small caps may boost performance right now

Published

7 months ago

October 19, 2024

Business Finance News

Stock picking may be the key to getting exposure to small caps.

Rob Harvey, who’s behind the Dimensional U.S. Small Cap ETF, uses an actively managed approach to buying the group. He’s trying to avoid small caps that are underperforming and dragging down the index.

“There’s no reason to hold companies that really are scraping the bottom of the barrel in terms of profitability,” the firm’s co-head of product specialists told CNBC’s “ETF Edge” this week. “You remove those from your small cap universe, [and] you can do a lot for boosting returns.”

The Russell 2000, which tracks small caps, is up more than 12% so far this year. Meanwhile, the broader S&P 500 is up about 23% in the same time frame.

As of Thursday, the fund’s top holdings were Sprouts Farmers Market, Abercrombie & Fitch, Fabrinet, according to the Dimensional Fund Advisors website. However, its top holding is cash and cash equivalents, which accounts for 1.13% of the fund.

Ben Slavin, who’s global head of ETFs for BNY Mellon notes investors are looking for more actively managed products to screen out small cap laggards.

“Investor sentiment has shifted towards small caps, and you see that in the numbers, in terms of where investors are putting their dollars, from a flow standpoint,” said Slavin. “These types of strategies are benefitting.”

As of Friday’s close, the Dimension U.S. Small Cap ETF is underperforming the Russell 2000 by more than one percent this year.

Finance

Insiders at UnitedHealth are scooping up tarnished shares

Published

2 days ago

May 16, 2025

Business Finance News

Key Points

UnitedHealth Group saw some of its insiders step in and purchase declining shares this week.
Kristen Gil, a director at the firm, bought 3,700 shares worth roughly $1 million on Thursday.
Shares of UnitedHealth plunged nearly 11% to $274.35 on Thursday following a report in The Wall Street Journal that the Department of Justice is conducting a criminal investigation into possible Medicare fraud.

Finance

Federal Reserve will reduce staff by 10% in coming years, Powell memo says

Published

2 days ago

May 16, 2025

Business Finance News

U.S. Federal Reserve in Washington, DC, on January 30, 2024.

Mandel Ngan | Afp | Getty Images

The Federal Reserve will look to reduce its headcount by 10% over the next couple of years, including offering deferred resignation to some older employees, central bank chair Jerome Powell said in a memo.

“Experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources. The Fed has done that from time to time as our work, priorities, or external environment have changed,” Powell said in a memo obtained by CNBC.

The central bank chief added that he has instructed leaders throughout the Fed “to find incremental ways to consolidate functions where appropriate, modernize some business practices, and ensure that we are right-sized and able to meet our statutory mission.” One method for shrinking the staff will be to offer a voluntary deferred resignation program to employees of the Federal Reserve Board who would be fully eligible to retire at the end of 2027.

The central bank said in its 2023 annual report that it had just under 24,000 employees. A 10% reduction would bring that number below 22,000.

The memo comes as the Trump administration has pushed for cost cuts across civil service agencies, spearheaded by Elon Musk and the so-called Department of Government Efficiency. Musk has previously called the Fed “absurdly overstaffed.” Powell’s memo did not mention Musk or DOGE as a factor in the decision to shrink headcount.

The planned staff cuts were first reported by Bloomberg News.

— CNBC’s Matt Cuddy contributed reporting.