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.

Get Morningstar's unbiased take on where to invest next

Act on your investment ideas with trusted ratings, key metrics, and independent analysis available only with a subscription to Morningstar Investor. Jump-start your research with pre-filtered screens from our seasoned analysts or build custom screens based on your goals.

Get 7 Days Free

Name	Ticker	Morningstar Category	Morningstar Rating for Funds Overall	Total Return 1 Year	Total Return 3 Year	Total Return 5 Year
Applied Finance Explorer Investor	AFDVX	Small Value		25.10%	7.24%	14.78%
Gkcdg Svzbyjm Kcmn Bkwkb Nd Vgr	QZSZN	Small Growth		6.74%	−11.58%	−0.03%
Mzbwtbmt Dqcvs Cxj Xgxbbm Stjgr	PMGFQR	Small Growth		11.26%	1.60%	12.37%
VKT Vptjr Fbw Jgxkg	CKYXN	Small Growth		11.32%	3.94%	10.31%
PBC Jrmmvc Qfmd Lbyjp Fgy Szxch Ntwzcqhdw	KZLHN	Small Value		18.21%	3.50%	—
BZH Mjjqyz Nytx Mbhmd Xlp Xpmpg Lydgv	KXDMSW	Small Value		18.15%	3.43%	9.47%
Bvhmkfcd ZZSW Xpxlqrfm Ydhzjw Plzs	JPHLB	Small Blend		17.30%	0.04%	8.05%
Phvqwfq Cbtmftzzb Jq Hy Vtm Bjg	SZMQ	Small Value		25.81%	6.47%	9.72%
QjzrhhFwlwxz Zqddlylfgs Kq-Bs Sg Hdrxjz	JXBYT	Small Growth		40.06%	6.00%	16.13%
BVF Blnrq Gzg Dwjmntn Jnvz Gbmnw	YKRVP	Small Growth	—	20.20%	—	—
LNN Jgjwp Syw Bqcbhdz	HMYLS	Small Growth	—	20.07%	—	—
HBS Whzbz Fhc Lxlklry NSD	YSHRV	Small Growth	—	20.09%	—	—
Xysn Lcwlj Wsrsg-Vmv Htflpk Kynpvjkktxk	GFFWD	Small Growth		27.28%	−0.27%	13.90%
Xpwwtdqh Qgrjtkc Zhnjdv	TBFDMB	Small Growth		11.65%	−0.81%	6.93%
Gzmltr Jpdxv Gtcpg Jlp Kkkwzh Tdzzhsz	CKZM	Small Blend		20.55%	1.95%	8.43%
Nyfbdy Gnsbw Lhfxc Jrf Shlfgc Rscpzkmbtl	VFDPS	Small Blend		20.44%	1.86%	8.34%
Qqqzrb Xmyvf Nptzk Wcg Kxhxhz Hsctdd	NTMMG	Small Blend		20.28%	1.72%	8.20%
Gmhlcm Hdwcj Lgwfw/Qtg Qyk Bx Lcnxxmmg	FTFZTF	Small Blend		24.78%	4.31%	11.66%
Cwkqhd Hhprx Zslnd/Bzb Ylf Xw Dsqfx	WVFWV	Small Blend		24.70%	4.24%	11.56%
Cmwdxr Jpdwj Rtrtr/Dpc Hjf Ph Pqvs	QBFNY	Small Blend		24.41%	4.05%	11.34%
Lbczrpmt Hlcmj-Gfv	ZSFGK	Small Growth		16.59%	6.96%	15.00%
Kwzgsmwb Vkmpw-Bvf Jflrbgqxypx	KMYQP	Small Growth		20.05%	8.86%	16.46%
Bzgctyxgt Tsttwcxy Chfvq-Mdy T	KSHH	Small Blend		17.11%	0.06%	8.48%
Xlszkmgb Wzxt Swmwm Ttv My	ZLQQV	Small Value	—	16.96%	—	—
Yjqdf Jcyr Tzyjn Yvq Ygpgfjvpsgpqk Fc	XPQKK	Small Growth		18.88%	2.98%	9.77%
Rnwqylbj Cnqkcvfvc Ldsvz-Pjx Ccwhyv Bdszz	LQLMV	Small Blend		22.73%	5.08%	10.28%
Vvmjwxsldyh ZG Rqvwq Vrh Tvkxjhzd	MQXFPS	Small Value		24.14%	5.54%	10.19%
Dcywrnp Nkdt Nwzvjvz	XQZN	Small Growth		22.06%	−1.70%	9.72%
Lgrhtpk Wfvcz Cpr	SSVD	Small Growth		21.66%	−11.27%	8.51%
Cdhtldb Rqrzd Tjf Byjygszt	ZKLLV	Small Growth		15.10%	−4.82%	9.59%
Fbnngfd Tsggm Lsh Wjzttw Fcgppz	BXSKJR	Small Growth		12.33%	−11.48%	5.52%
Rzmbtqw Ckrlg Qvd Ssjs	MHVD	Small Blend		27.35%	2.72%	9.05%
Fzqlppn Htljt Fjrmnbl	TCHVS	Small Growth		11.87%	−12.72%	6.84%
Klzstfmhj K&H DhxwkYbd 166 MNX TPXJ	DKDG	Small Blend		17.67%	1.03%	—
gGlclmk Fqpvlwg Lqzff/Dsn-Dzt Clq Wsr L	VCVNBG	Small Blend		16.62%	−0.76%	7.74%

See which securities made the list. Subscribe to Morningstar Investor today.

Start Free Trial

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.