Johnson invests in Dodge & Cox (DODGX), a large-cap fund (one that invests mainly in large companies); Hartford MidCap (HFMCX) and Olstein Financial Alert (OFAFX), both mid-caps; and Liberty Acorn (LACAX), a small-cap fund
. At the suggestion of his advisor, he also increased his exposure to international stock funds earlier this year because the U.S.
Religare Mid N Small Cap Fund, HDFC Mid-cap Opportunities and DSPBR Micro Cap are the other 5-star funds in the mid- and small-cap fund
This mid- and small-cap fund
returned 33% a year in the 10 years to 9 November 2012, the second-best in the category after Sundaram Select Mid-cap.
The best performing stocks will grow to become mid-caps, so they won't be eligible for that small-cap fund
Overall, the small-cap fund
category increased 7.4% in the fourth quarter.
Faced with the difficulty of selecting emerging companies with high growth potential in an unforgiving market, the group is considering purchasing the Vanguard Explorer small-cap fund
to try to capture better returns.
The first was Kothari Pioneer Mutual Fund, which launched two schemes-Kothari Pioneer Prima, an open-ended mid- and small-cap fund
, and Kothari Pioneer Bluechip, a close-ended large-cap fund-in November.
You should select a range of mutual funds in different categories, suggest an index fund, which will mirror the market's performance; a small-cap fund
, which will give you an opportunity to benefit from small, fast-growing companies: a mid-cap value fund, which will give you the benefit of companies that may have hidden value; and an international or foreign fund, so that you can benefit from markets outside the U.S.
"I'm also looking at Ariel (ARGFX), a small-cap fund
." If the economy continues to expand this year, the smaller companies that made it through tough times might post impressive profits.
As owners of the firm, we do not want to take that risk." Therefore, all Somerset's strategies have a capacity limit: Its small-cap fund
, for example, was closed at $400 million assets, only three years and five months after first being offered to clients.
1) LMCG Investments Launches International Small-Cap Fund
A third path would be a passive small-cap fund
less subject to capacity issues.