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Small-Cap Funds for the Long Haul

Our Premium Fund Screener reels in some of the best.

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Small-cap funds have left their bigger brethren in the dust this year. Among our diversified domestic-equity fund categories, small-growth leads the way, with the small-blend and small-value peer groups following close behind. It's an impressive run, to be sure, particularly given that smaller fare held up relatively well during the protracted bear market, too.

As savvy investors know, however, what goes up tends to come down. A hot category can turn cold quickly, and last year's goat can become this year's hero faster than you can say "missed opportunity." Indeed, during the growth craze of the late 1990s, the market's larger names were generally the big winners.

Performance-chasing and market-timing are losers' games, of course, and not even professional stock-pickers can manage to get them right with any degree of consistency. So, we think most investors will be best served by having a well-diversified portfolio that provides exposure to a broad swath of the market's industries, styles, and capitalization ranges.

Shannon Zimmerman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.