Small cap stocks are at a record and these hedge fund favorites in the group are doing even better

Traders work the floor of the New York Stock Exchange.

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Small caps are leading the market's record-setting rally and the names favored by hedge funds have particularly been on a tremendous run, topping the Russell 2000 by more than 60% on average this year, according to RBC.

The Russell 2000 has soared more than 20% this month, on track for their best month ever, as investors piled into beaten-down value names amid vaccine optimism. RBC screened the benchmark for stocks with the most hedge fund dollars invested based on an analysis of 330 hedge funds' most recent 13F regulatory filings.

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