PNC Financial is souring on small caps' record run.
In an interview on CNBC's "Trading Nation," the firm's co-chief investment strategist questioned the rally's sustainability.
"We would tend not to chase the small-cap run," Amanda Agati said Wednesday. "It's really hard to say 'back up the truck here, and put new capital to work in small caps.'"
Agati's bear case is in the minority.
"They are clear beneficiaries of the tax package, clearly insulated from trade and protectionist concerns - as well as movements in the dollar. So, they really are in a sweet spot," she said.
But her main issue is with the rally's intensity. She warned that it is becoming overextended, and the group could soon find it tougher to make profits.
"It's amazing that the small caps continue to hit new highs," she said.
The Russell 2000, which is composed of small-cap stocks, logged its 18th record close for the year on Wednesday. It's up 7 percent in just the last month and 20 percent over the past year.
"If you want exposure to small caps, we'd be very selective - focusing on higher quality names and not just recommending buying the index," Agati said.