Micro Cap Fund

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Micro Cap Fund

A mutual fund that invests predominately or exclusively in stocks with very low market capitalization. In general, a micro-cap company has a market capitalization of less than $250 million, but there is no hard-and-fast rule. Some brokerages or exchanges have slightly different definitions of micro-cap. Micro cap funds often contain new companies with strong growth potential; however, for this reason, they may be high risk.
References in periodicals archive ?
com Index, weekly columns written by well-known Wall Street professionals, a searchable database profiling more than 5,000 companies, daily and weekly MicroCap market recaps, reviews of MicroCap funds, portfolio tracking services and investment alerts sent directly to subscribers via e-mail.
In that same press release, Scott Johnson, chairman of Sterling Johnston Capital Management, a firm that manages more than $600 million in institutional microcap equity said, "The index should prove to be a useful tool that will ultimately help asset managers and investors more accurately gauge the performance of their microcap funds and we believe it will also create interest in this very important asset class.
The boom in online investing and financial information services, coupled with the fact that MicroCap funds out-performed SmallCaps in 1996 and 1997, has created an ideal climate for MicroCap investing.