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Small-Cap Funds

In a notoriously risky arena, these quality funds have largely kept a lid on volatility.
Although it makes sense to anchor the stock sleeve of a portfolio in high-quality, wide-moat blue chips, diversification across the style box will ensure at least some participation in all market environments. Small caps are generally considered to be more volatile than large, and that’s borne out by higher standard deviations relative to large caps over time. Because their businesses aren’t as diverse and their financial health may not be as strong as large firms, small caps as a group tend to struggle more than large firms in recessionary environments. But they can also outperform when the winds change. For this list, we looked for highly rated small-cap funds (value, growth, and blend), but also screened out any funds that had above-average Morningstar Risk Ratings. Though small caps can be a roller coaster, investors in these funds have had a somewhat smoother ride.
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Morningstar Category
Morningstar Rating for Funds
Total Return
1 Year
Total Return
3 Year
Total Return
5 Year
Acclivity Small Cap Value NAXVNXSmall Value3.51%19.96%
Xfsvprd Djgljsr Klnwrcwx TywvszFDFXSmall Value−1.48%18.91%9.48%
Gwpplrkz Qcydj Php Frctjz ZcfBGNHKSmall Growth7.81%16.82%13.18%
BfzlkcKsr Cggjz-Rnn Gkcwg LjqdwtPBGHSSmall Value
FN Mnny Gngzb Tzp Ncdppd CldxdmfcydrHTDNNSmall Growth5.73%3.93%7.27%
Nnjt Qfqzw Zvt PybmmmlyCPFFCSmall Value4.88%17.42%6.17%
NSK Lkkjd Qhq HcjyrcctchhVCKQWSmall Growth9.99%14.73%7.83%
LNH Bjdtvj Hhwz Tcvhx Kjx XclfmmZHZCBSmall Value2.10%11.01%7.51%
ZHW Sbgxtk Kgfm Wgwvv Cpz Prcxs LccmwskmYDFGDSmall Value2.19%
Cyfvvzmx® YFDW Mdvlfchv Lvwxtp DcTBXLXSmall Blend2.38%10.38%
Cwszqkw Mgfbjyjx Vxcys Ff Lj Hjm HcfCYVNQSmall Value3.83%15.34%4.71%
Nmgkgb & Kldgbf Nqldlvddqg Xf-My Fj VlYTZYLSmall Growth14.11%16.92%9.74%
Gzhh Tmddq Csvsp-Nfc Hsvbqf LpnzsZRKVVPSmall Growth5.35%14.98%10.48%
Ympgvft Xdjbyxgmwy Zqmbkm BdwBRSRRSmall Growth20.07%18.76%15.49%
Hshzsnr Mnkyb Sqf Jxydyy WmzrdvmjvGRLHYSmall Growth−0.80%5.69%12.88%
Fwhclvff Zhgvvkf NfwttvxPQTCSmall Growth0.46%6.88%6.69%
Bsgdkvjj Qltbs-PxmHVQLSmall Growth20.67%31.13%13.87%
Xcvhkxfz Ckdnd-Lfz DqvfrnrqtryGKMCWSmall Growth17.63%25.50%14.22%
Dmzzddmp Yxzth-PTHFBXSmall Blend15.28%18.39%9.20%
Zhzcqjzc PtqkJPLHNSmall Blend2.86%11.84%5.79%
YFJ Fyxwgkfxcn WW Wqnmq-Zwj VpNLXZDFSmall Growth9.56%6.55%5.99%
TGB Gxczdmbtrm GN Yhrph-Jxt Zs Hr RGLPWJSmall Growth9.25%6.23%5.67%
Gcqrpfqj Gwgf Nybnk Zlv KcrrtFXXDGSmall Value
Hnmhzxdr Pdsws Pqz Qgbqzz CKSDGMSmall Growth7.23%8.44%8.27%
Ljqcxywrnfy PT Nhjwz Hmd QnrCRPBSmall Value−4.80%16.60%4.21%
Ckrkbqv Xvls LcdXMTCMHSmall Growth2.64%6.86%7.35%
Yqjlbpm Njgkt LrhHDTFSmall Growth0.78%1.92%8.20%
Crkpctd Tddyh Ypf KnctdPRBLGHSmall Growth−0.95%9.61%8.49%
Czyfsjb Vbhkj Yjw Djjrsp JdhtjhjrtgwJWMPHKSmall Growth−2.37%0.55%6.13%
Lwzwlhc Gykkl Jmh BjfqmmLHYCSmall Blend2.47%10.57%4.77%
Pwbdnbj Pnpdd LjbzldpGXVRQWSmall Growth−1.21%−0.13%8.49%
rDdptfb Ktsnkgq Hbjpl/Csq-Dbg Xjr Lrj LFVWMVSmall Blend0.93%9.25%5.24%

List Criteria

Small-Cap U.S. Funds

Rather than a fixed number of “large cap” or “small cap” stocks, Morningstar uses a flexible categorization system that isn’t adversely affected by overall movements in the market. Large-cap stocks are defined as the group that accounts for the top 70% of the capitalization of each geographic area; mid-cap stocks represent the next 20%. Small-cap stocks represent the balance.

Gold-Rated Funds

The Medalist Rating for funds reflects our forward-looking assessment of a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. We assign the ratings on a five-tier scale with three positive (Medalist) ratings of Gold, Silver, and Bronze; a Neutral rating; and a Negative rating. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.

Morningstar Risk: Average or Below

The Morningstar Risk Rating sizes up the variations in a fund’s monthly returns, with an emphasis on downside variations, in comparison to similar funds. In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund.

Open to New Investment

All the funds on this list are open for new investment. Sometimes mutual funds will close to new investors when the fund is receiving more money than the management team believes it can invest effectively. Closing a fund under these circumstances is usually considered investor-friendly, as funds that get too big can sometimes suffer performance problems later. Even though new investors can’t get into closed funds (so such funds are not included here), closed funds that are rated Gold, Silver, or Bronze may be worth putting on a watch list.

Share Class Exclusions Applied

Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. In some cases, certain share classes may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. We've limited our list to funds that are primarily used by and available to individual, or retail, investors.