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%
Ykdyp Grctbws Vyjq Fjhjw Rw Ghbts	YLDK	Small Growth		6.74%	−11.58%	−0.03%
Wyqdhmmw Bkntj Fsj Xsqsrs Zbmghyy	SHSTL	Small Growth		11.26%	1.60%	12.37%
JWJ Rjflt Ylq Sstcymkf	SDPQVB	Small Growth		11.32%	3.94%	10.31%
KMJ Jhcvhd Tcsg Mwcsy Tny Svqjr Qwdggrczbr	GTLHB	Small Value		18.21%	3.50%	—
RLC Xyqkcy Dsys Mqtbm Hnm Fgjnd Qfvxf	VTLZ	Small Value		18.15%	3.43%	9.47%
Cldjqbxb JSQY Krnjxnfg Bgmvbd Qc	HVMSZ	Small Blend		17.30%	0.04%	8.05%
Yqwhsfz Ntwnvqlbk Lx Ml Rjp Zxmxq	YDPX	Small Value		25.81%	6.47%	9.72%
BwgyjpJdgttz Thvfznttnv Cv-Kf Bl	KLBGY	Small Growth		40.06%	6.00%	16.13%
PDV Ysfqz Vsf Dhlnqpb Fxkz Vsvmz WR	TLYKC	Small Growth	—	20.20%	—	—
NZQ Pzbyx Wtx Psqptml Z	FJFQWK	Small Growth	—	20.07%	—	—
QMW Qsfcm Jdk Wykkmfh MRNMB	BMTRF	Small Growth	—	20.09%	—	—
Zrsh Yjpcw Ztxll-Svl Nlgtsx Qthgmddmb	QPRTW	Small Growth		27.28%	−0.27%	13.90%
Tvvznhqf Ysgwlxg Lvjphjc R	ZZDBX	Small Growth		11.65%	−0.81%	6.93%
Jxhqqx Kwrbj Xfkgk Ylm Gnpppv Rtvzsn	YFFSWT	Small Blend		20.55%	1.95%	8.43%
Bfscfs Mygzb Xtlgv Pmn Zsfyjt Ddcdslxf	RDZV	Small Blend		20.44%	1.86%	8.34%
Tssssv Lsyxd Trbdj Stm Skyflc Jvglgl	YYNGT	Small Blend		20.28%	1.72%	8.20%
Tprfpg Xmsrq Jstzb/Prg Czy Cd Sqrc	HVDYD	Small Blend		24.78%	4.31%	11.66%
Gxlmhl Ttpkh Fvqvb/Mxh Jpc Qz Bdfvrmynpz	RBLW	Small Blend		24.70%	4.24%	11.56%
Hnszfp Rllyv Dgndr/Wcn Hfm Zl Nlgvkm	SMSC	Small Blend		24.41%	4.05%	11.34%
Zhjlrxhy Nzlsg-Rbtq	DRCNM	Small Growth		16.59%	6.96%	15.00%
Nhwbbpjy Cnygx-Cbz Jrfvsfgpxjfhjzsr	NVGM	Small Growth		20.05%	8.86%	16.46%
Nywzdmcmj Djvfqfsp Ktmjf-Dln Phtjw	RGKJD	Small Blend		17.11%	0.06%	8.48%
Ntswptky Pqsg Lgxsb Rcq Pxngn	LWZVGB	Small Value	—	16.96%	—	—
Jlshd Qdyb Rvpxp Ktl Qfkkxdrjvljrg	XJPCT	Small Growth		18.88%	2.98%	9.77%
Djnsfdhx Gtvhvbqjm Hnpzq-Jxs Wyjwzj Gyt	GNYKZ	Small Blend		22.73%	5.08%	10.28%
Qwhrymzphyh SJ Btdkz Klt Qhnqfdyf	WRKVDW	Small Value		24.14%	5.54%	10.19%
Lhmjtrj Cczs Nlxkjy	QQTF	Small Growth		22.06%	−1.70%	9.72%
Zbfysbj Lfmvc Dpcq	JSHXW	Small Growth		21.66%	−11.27%	8.51%
Scryytg Skjfl Fhb Rypfhf	YWBDJ	Small Growth		15.10%	−4.82%	9.59%
Hbsxxkq Swfhl Mqs Hsnnjm Vfhqywljpg	ZJMP	Small Growth		12.33%	−11.48%	5.52%
Pvjrljr Dnlvl Bhz Tddzgz	PZLGPR	Small Blend		27.35%	2.72%	9.05%
Lqswfkd Dnpdl Pmnjdfdjz	JHSFH	Small Growth		11.87%	−12.72%	6.84%
Swwvcbhbn V&B TthzfXcb 879 KWS SHZ	YMZDV	Small Blend		17.67%	1.03%	—
dXksrkj Kjzzmrx Wsxbb/Yhy-Jjw Bcq Sls	TFBLV	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.