Small-Capitalization Fund

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Small-Capitalization Fund

A mutual fund that invests primarily or exclusively in small-capitalization (small-cap) stocks. In general, a small-cap fund invests in companies with market capitalizations of less than $1 billion or $2 billion, but there is no specific definition. Some brokerages or exchanges have slightly different definitions of small-cap. See also: High-cap, Mid-cap.
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References in periodicals archive ?
Investment in equity category can be considered in multi-, mid- and small-cap funds as they deliver better than index return in the long run," he added.
Cremers also found that "small-cap funds tend to have higher Active Shares and better performance than large-cap funds, which suggests that small-cap managers have better stock picking opportunities in general."
Over the five-year period, 28% of large-cap funds, 24% of mid-cap funds and 30% of small-cap funds in the bottom quartile disappeared.
New Delhi: Providing better returns to investors, majority of equity-linked saving schemes as well as mid- and small-cap funds outperformed their respective benchmark stock indices over a five-year period ended December 2015, according to a report.
Mid-cap and small-cap funds have done wonders to investors' portfolios.
Small-cap funds sometimes face situations that require them to liquidate their holdings, for example when the market capitalization of a small firm increases so much that it is no longer suitable for inclusion in a "small cap" fund.
Hence, investors who can stomach market volatility and have an investment horizon of more than five years could consider investing in madcap and small-cap funds.
Some small-cap funds may stray into bigger companies, for example, or a conservative, value-oriented fund might start chasing some high-fliers.
These moneyspinners are not mid- and small-cap funds that invest in little-known stocks and typically have low asset bases.
Through September of this year, S&P found that only 19 percent of large-company funds, 20 percent of mid-sized company funds and 27 percent of small-cap funds held their top-half performance rankings over three-consecutive three-year periods.
The ChoicePlus Assuranceand American Legacy risk-managed fund lineups are made up of asset allocation options, as well as individual asset class options, including large, mid- and small-cap funds, as well as domestic and international market exposure.