Waddell & Reed Rides AOL to Sizzling Returns

How does a self-described small-cap fund wallop the S&P 500 in a year in which large-caps are the favorites by far?

The answer for (WRGRX Quote)Waddell & Reed Growth in 1998 was, in part, simple: Make your biggest holding a "little" company called America Online (AOL Quote).

Hold on a minute -- America Online? Yep, you heard right. You may argue with the way the fund posted the sizzling numbers it did last year, delivering a red-hot 45% return, beating the index by a good 16 percentage points (all data from Morningstar). But you get no apologies from Growth's managers, Mark Severovich and Grant Sarris. ...