clients invest in small-cap funds rather than micro-caps,” says Robert Pagliarini, a certified financial planner and executive vice president with Allied Consulting Group in Los Angeles. “The companies in small-cap funds aren’t quite as risky as micro-caps because small-caps can own companies with market caps of up to $1 billion.” Micro-cap funds generally restrict holdings to companies with a market cap of $350 million or less.
Small-cap funds also offer the possibility of outstanding returns. Says Pagliarini, “Our current favorite, Third Avenue Small Cap Value (TASCX), usually keeps 10% to 20% of its assets in micro-caps so investors have some exposure to those stocks.” Lutton, too, says that while there are no micro-cap funds on her “pick” list, she favors Royce Total Return (RYTRX), a small-cap fund that may hold around 15% of its assets in microcaps.
Whether you prefer to buy small or extra-small, mutual funds that hold little companies can deliver sizable returns. If you can stand the risk of a steep slide now and then, putting a pinch of micro-caps in your portfolio can pump up your long-term profits.
|
Top Retail Micro-cap Funds by 3-Year Return |
||||||||
|
Fund Name |
Ticker |
Category |
1-Year |
3-Year |
5-Year |
Geometric |
Min. Initial |
Phone |
| Perritt Micro Cap Opport | PRCGX | Small Blend | 60.83% | 23.92% | 20.22% | 158 | $1,000 | 800-332-3133 |
| Satuit Capital Micro Cap | SATMX | Small Blend | 61.23 | 20.51 | NA | 289 | $1,000 | 800-567-4030 |
| Tamarack Enterprise A | TETAX | Small Blend | 41.82 | 18.87 | 15.44 | 317 | $1,000 | 800-422-2766 |
| Aegis Value | AVALX | Small Value | 37.66 | 18.64 | 19.62 | 236 | $10,000 | 800-528-3780 |
| Perkins Discovery | PDFDX | Small Blend | 61.45 | 16.57 | 17.53 | 69 | $2,500 | 800-998-3190 |
| Tamarack Micro Cap Val A | TMVAX | Small Value | 56.51 | 16.21 | 14.80 | 329 | $1,000 | 800-422-2766 |
| Munder Micro-Cap Eqty A | MMEAX | Small Growth | 66.78 | 14.98 | 17.26 | 343 | $2,500 | 800-468-6337 |
| Corbin Small-Cap Value | CORBX | Small Value | 32.15 | 11.81 | 6.07 | 118 | $2,000 | 800-924-6848 |
| TA IDEX TA Sm/Md Cp Val A | IIVAX | Small Value | 56.55 | 11.76 | NA | 282 | $1,000 | 888-233-4339 |
| Gabelli Westwood Mighty A | F009PB | Sm all Value |
28.48 | 10.75 | 12.48 | 157 | $1,000 | 800-422-3554 |
| Source: Morningstar Inc. Morningstar makes every effort to ensure the completeness and accuracy of this data but cannot guarantee it. Micro-caps are defined as funds with geometric average market caps of $350 Million or less. returns through April 30, 2004. | ||||||||