The key to gaining exposure to small cap stocks could lie in skilled stock selection, according to Rob Harvey, the man behind the Dimensional U.S. Small Cap ETF. Harvey uses a proactive approach in purchasing these stocks, aiming to steer clear of underperforming small caps that could negatively impact the index.

“There’s no need to retain stocks that are seriously underperforming in terms of profitability,” Harvey, the co-leader of product specialists at the firm, shared on CNBC’s “ETF Edge” this week. “Once you eliminate these from your small cap portfolio, you can significantly enhance returns.”

The Russell 2000, a small cap index, has seen an increase of over 12% so far this year. In contrast, the broader S&P 500 has risen around 23% in the same time span.

As of recent data, the top investments in the fund were Sprouts Farmers Market, Abercrombie & Fitch, and Fabrinet, as per the Dimensional Fund Advisors website. However, the fund’s largest holding is in cash and cash equivalents, making up 1.13% of the fund.

Ben Slavin, Global Head of ETFs at BNY Mellon, notes that investors are now leaning towards more actively managed products to weed out underperforming small cap stocks.

“Investor sentiment is leaning towards small caps, and this is reflected in the investment patterns and where investors are channeling their money,” Slavin said. “Strategies like these are reaping the benefits.”

As of the close of the market on Friday, the Dimensional U.S. Small Cap ETF is lagging behind the Russell 2000 by more than one percent this year.