This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Winners Come in All Sizes

It's easy for investors to get wrapped up in the never-ending fight between large-cap and small-cap funds, much like boxing fans have trouble naming the reigning flyweight, featherweight and welterweight champions. From prizefighting to fund-picking, it's just easier to focus on one or two classes.

Unfortunately, that narrow style of thinking causes investors to rule out a number of mutual funds simply because of their size.

To illustrate how good funds come in all shapes and sizes, here are three off-the-rack funds worth trying on: a mega-cap, a micro-cap and a mid-cap. (And for you boxing fans, I'll list the current fly, feather and welterweight champions at the end of the article, just in case you forgot.)

Giant Gains

For a nation that prides itself on its ability to "super-size" most anything, it seems almost unpatriotic to say there are only seven mega-cap stocks listed on U.S. exchanges. Nevertheless, that's the number that qualifies as being the biggest of the big, a lucky seven that includes British Petroleum (BP), Citigroup (C), ExxonMobil (XOM), General Electric (GE), Microsoft (MSFT), Pfizer (PFE) and Wal-Mart (WMT).

John C. Thompson owns all of these giants, save the ADR British Petroleum, in the $1.4 billion (THPGX) Thompson Plumb Growth fund. And he's not troubled by holding them in large stakes, either. In a fund of 57 stocks, Microsoft makes up almost 6% of the portfolio and Pfizer close to 5%. GE and ExxonMobil each weigh in at close to 2% of the fund's asset base.

In total, the top 10 stocks in the mega-cap fund account for close to 50% of its assets, a fairly concentrated portfolio even if the stocks bear household names.

But even though the fund seems top heavy, Thompson's track record demonstrates that he can skillfully navigate the land of the giants. The average market capitalization for the stocks in the portfolio is on par with the S&P 500 at a healthy $45 billion, yet the fund has returned 17.94% annually over the last 10 years, more than 6% better than the S&P 500 over the same period. The fund has beaten the index by 6.32% and 12.49% over the past three and five years.

Sizing Things Up
Fund Sizes by Capitalization
Fund Classification Market Capitalization
Mega-Cap Greater than $200 billion
Large-Cap $10 billion-$200 billion
Mid-Cap $2 billion-$10 billion
Small-Cap $300 million-$2 billion
Micro-Cap $50 million-$300 million
Source: Morningstar

1 of 5

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs