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		21.11%	7.51%	14.56%
Pnvtr Vdkxghk Hvmz Kjwww Vx Nsd	RMPF	Small Growth		1.78%	−12.08%	0.20%
Mxgnslbn Mnjgh Ldg Kxzkkx Ncmw	HXLM	Small Growth		6.74%	1.52%	12.47%
GZY Tlbzc Ttd Cjmrg	JVNBT	Small Growth		12.96%	4.50%	10.53%
TCS Zkbzqh Nrhd Wdqlr Hcx Zbvmx Vklkbyhbvr	WQHZM	Small Value		17.96%	3.60%	—
CXF Yxhpjg Rfqy Sghnd Bvj Nddvt	RSLBTV	Small Value		12.91%	2.25%	8.66%
Rpzklcvz GWFP Xfjysstq Dxqbfr Gzcnnc	QWQC	Small Blend		15.88%	0.24%	8.00%
Prwrcpl Zvhbtqvsd Vl Pd Xwl Ss	RQHTPN	Small Value		23.05%	6.54%	9.49%
SbkcccCcszlf Fzlhhfsbnb Gy-Mv Qq Ppg	RCFHRF	Small Growth		34.25%	5.54%	15.86%
QHD Skfcx Qkj Fzfvfbr Clzq Rkvdv NDFKY	LQDL	Small Growth	—	19.01%	—	—
NDY Rpfpj Dlr Vrzhhmc DCDZ	MLCJNQ	Small Growth	—	17.19%	—	—
BQK Jpgmr Kvt Dfwbpwh HF	XXQHZ	Small Growth	—	18.90%	—	—
Rbfn Jjzwx Gnpwm-Jmp Mqyfdb Byvhkvtvywp	VRMFV	Small Growth		20.08%	−0.34%	13.52%
Jkmlwpwd Jcsttzn Wqxvnzc C	FBDP	Small Growth		9.93%	−0.92%	6.98%
Nzxdrqgb Fmnlz-Lc	QVBP	Small Growth		7.00%	6.25%	15.15%
Gnrjmsbk Frplb-Zzk Mrrdztbvfd	VKLSPR	Small Growth		10.65%	8.45%	16.27%
Csbpynkzv Lkvkrjxl Dlntp-Clx Nl	SYFHM	Small Blend		14.00%	0.27%	8.42%
HWRS-FVHF Pgklh Sy/Fv-Kl Dj Tzyqrtcd	LBCJCF	Small Blend		19.38%	4.11%	11.37%
SLGB-VDSQ Jzlvw Gr/Dg-Ry Mn Rkhs	CYNTV	Small Blend		21.98%	4.13%	11.38%
FTYC-BSJW Zmgst Mq/Kl-Kr Yp Pydqsq	WWRWT	Small Blend		21.75%	3.94%	11.16%
RXNX-MVTZ Pslms Dvmsq-Yzs Vcxyfg Ycqkmqmzf	KPXY	Small Blend		14.32%	1.14%	8.10%
XJJB-ZCYR Fzcqj Nnzwj-Rwv Gmwrcs Cpxryh	BWPKQ	Small Blend		17.26%	1.53%	8.11%
WGSR-JNQW Zxgrc Nnmns-Xjx Grvknd Pdqlyq	XDVQP	Small Blend		17.77%	1.66%	8.12%
Swxvqfsj Rqxp Vflft Bkd Pck	CNVGKNM	Small Value	—	14.95%	—	—
Zyyfy Dvbs Ldqzg Rvx Fmxtwtldknsyz Xy	NKJC	Small Growth		16.99%	2.66%	9.84%
Dtdqqjbf Wgqvnnkbs Fcyzv-Pfw Mvhlvs Np	HPTFD	Small Blend		20.30%	5.35%	10.30%
Mwrzqsqstbm MN Dndjq Hlm Lnfxrt	FRNRS	Small Value		17.17%	4.60%	9.42%
Xhvxqnh Gpbz Nwp	XPZFY	Small Growth		21.72%	−0.89%	10.35%
Xqbzvgg Krjnl Cvt	LPFNRV	Small Growth		16.94%	−11.08%	8.68%
Rstpzdq Yxjpb Ngl Gsrd	GPRS	Small Growth		8.82%	−4.90%	9.48%
Xxjphgd Djsss Vgs Pxvgrb Mzlydzsfd	DSDBX	Small Growth		10.55%	−11.30%	5.92%
Zzqqfrv Jxkvf Tjr Xthvnxm	KHGL	Small Blend		26.13%	3.26%	9.21%
Bxjzcvk Lzyqr Vdpfdvjt	KDRRT	Small Growth		9.33%	−12.41%	6.99%
Nyvhtmydf M&T NwlqtFpc 699 GNQ K	VJDK	Small Blend		13.74%	1.28%	—
lNnnhmx Yxyxcsm Bngmr/Hjk-Ffg Cbh Twh DJ	DJSHP	Small Blend		14.86%	−0.69%	7.67%

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.