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The stock market has been soaring this month on vaccine optimism coupled with a potential divided government. These have raised expectations of a sharp economic recovery even though the spike in new cases is weighing on sentiments.

Moderna (MRNA - Free Report) and Pfizer (PFE - Free Report) reported encouraging data for their COVID-19 vaccine. Moderna’s vaccine candidate was 94.5% effective against coronavirus while new data from Pfizer’s final Phase 3 trial revealed that its COVID-19 vaccine candidate is 95% effective. The drugmaker is poised to apply for emergency use authorization of its COVID-19 vaccine anytime soon. Last week, the company’s late-stage trial showed that the vaccine candidate was more than 90% effective in preventing the disease.

Meanwhile, Democratic candidate Joe Biden is likely to gain the control of the White House having become the presumptive president-elect of the United States while Republicans may keep the Senate. The combination will lead to favorable economic policies with reduced chances of major tax increases and tighter regulations.

While the rally has been broad-based across all the market caps, small-caps stocks, as indicated by the Russell 2000 Index, has been outperforming and is hitting new all-time highs. Notably, the small-cap index broke into record territory last week for the first time since August 2018. It climbed more than 10% over the past month compared to gains of 3.8% for the S&P 500 and 4.3% for the Dow Jones.

This outperformance came as the small-cap companies are closely tied to the U.S. economy and thus poised to outperform when the economy improves. These stocks generally outperform on improving American economic health. The latest bouts of data also underscore an improving economy. The U.S. economy grew at a record pace of 33.1% during the third quarter of this year, indicating a revival from the effects of the pandemic. Industrial production rose 1.1% in October, recovering much of the spring decline caused by the virus pandemic.

Further, the Federal Reserve pledged to keep interest rates at lower levels until the end of 2023 that bodes well for the pint-sized stocks. Moreover, “January Effect,” which is a seasonal increase in stock prices largely due to year-end tax considerations, has been fueling a rally in the small-cap space.

That being said, there are winners in almost every corner of the small-cap space. Below we have presented five top-performing small-cap ETFs of the current rally that have gained in double digits and will continue their outperformance.

Invesco KBW Regional Banking ETF (KBWR - Free Report) – Up 20.2%

This fund offers exposure to companies primarily engaged in U.S. regional banking activities and follows the KBW Nasdaq Regional Banking Index. Holding 50 stocks in its basket, it is a relatively less-popular and less-liquid option in the space, with AUM of $35.2 million and an average daily volume of 7,000 shares. It charges 35 bps in fees per year from investors and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

iShares Morningstar Small-Cap Value ETF (JKL - Free Report) – Up 13.9%

This product provides exposure to small-cap U.S. companies that are thought to be undervalued by the market relative to comparable companies. It tracks the Morningstar Small Value Index and holds 235 stocks in its basket. The ETF charges 30 bps in annual fees and has AUM of $305.9 million. It trades in a volume of 5,000 shares per day on average and has a Zacks ETF Rank #3 with a Medium risk outlook.

Avantis U.S. Small Cap Value ETF (AVUV - Free Report) – Up 11.8%

This ETF invests in a broad set of U.S. small-cap companies and is designed to increase expected returns by focusing on firms trading at what we believe are low valuations with higher profitability ratios. It tracks the Russell 2000 Value Index and holds 543 stocks in its basket. The fund has gathered $459.8 million in its asset base and charges 25 bps in annual basis.

Vanguard Small-Cap Value ETF (VBR - Free Report) – Up 11.4%

This ETF offers exposure to the value corner of the small-cap space and follows the CRSP US Small Cap Value Index. It holds 909 securities in its basket and charges 7 bps in annual fees. The fund trades in moderate volume of about 461,000 shares a day and has amassed $16 billion in its asset base. It has a Zacks ETF Rank #3 with a Medium risk outlook.

Vanguard S&P Small-Cap 600 ETF (VIOO - Free Report) – Up 11.2%

With AUM of $1.1 billion, the product tracks the S&P Small-Cap 600 Index and holds 602 stocks in its basket. It charges 10 bps in annual fees and trades in an average daily volume of 34,000 shares. VIOO has a Zacks ETF Rank #3 with a Medium risk outlook.