Five Funds: Small Growth Funds With Supersized Returns

Small things have a way of overmastering the great. -- Sonya Levien

Here are three reasons why investors should be looking into small-cap growth funds right now.

Reason #1: The Short Term. In 2002, the small-cap growth sector performed horribly. The average small growth fund lost 28.4%. If you believe stocks are slowly emerging from the brutal bear market, then small-cap growth may be in pole position to recover. In the 15 months after the 1973-74 bear market, the small-cap growth arena returned 45.2% -- outperforming small-cap value and large-cap stocks by seven percentage points, according to Ibbotson Associates. Small-cap growth also outpaced the rest of the market during the five months after the 1982 bottom and the 12 months after the 1990 bottom. ...