The U.S. stock market has started to feel the heat of summer in some corners. While the S&P 500 and the Dow Jones Industrial Average have seen a summer lull so far, the Russell 2000 index and Nasdaq Composite index have been burning with impressive gains of 3.6% and 3.5%, respectively, over the past one month.

Small-cap stocks seem to be the hottest investment cluster for this summer. This is especially true in the wake of escalating trade tensions between the United States and some of its key partners, and bouts of upbeat data showing encouraging domestic economic fundamentals. Both factors are acting as a major tailwind for the pint-sized stocks that are closely tied to the U.S. economy and do not have much exposure to the international market.

Additionally, these stocks are well insulated from international headwinds including trade war fears and tariff concerns and are considered safe and better plays if any political issue or economic turmoil creeps into the picture.

Further, small-caps are getting a boost from the tax cut reform as stocks on the Russell 2000 pay higher taxes with a median effective tax rate of 31.9%. In comparison, the larger, multi-national companies on the S&P 500 pay a lower median effective tax rate of 28%, while the tax rate for 30 mega-cap stocks on the Dow Jones Industrial Average is even low at 23.8%.

The bullish trend is likely to continue for the rest of summer. As such, investors could smartly ride out the booming trends in the small-cap space through a number of ETFs but looking at the Zacks ETF Rank could help us to pick the likely best.

The system looks to take into account a variety of factors, such as industry outlook and expert surveys; and then apply ETF-specific factors (like expense ratios and bid/ask spreads) in order to find the best funds in each segment. Using this system, we have found a handful of ETFs in the space that have earned themselves a Zacks ETF Rank #1 (Strong Buy) in the latest ratings update, and could thus outperform.