Playing the Fed rate increase: Buy these ETFs

A trader works on the floor of the New York Stock Exchange.
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A trader works on the floor of the New York Stock Exchange.

June has started as a fine month for small-cap investors, if not for everyone else.

The Russell 2000 index of small-cap stocks is up 1.2 percent this month through early trading Wednesday, while the large-cap focused S&P 500 Is down almost 1 percent. The mega-cap Dow Jones industrial average is off 1.3 percent in June.

Small-cap stocks have gained ground despite concerns that rising interest rates will make all stocks less attractive.

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Investors seem to be recognizing that they can't fight the Federal Reserve if it decides to increase interest rates, but they can maneuver around the threat by focusing on what will benefit, especially as the U.S. dollar rallies on the expected central bank action.