The past few years have yielded few proud moments for small-cap investors. But small-cap stocks are showing visible signs of vigor. Since the end of March, the

Russell 2000

index, which tracks small-cap stocks, has jumped 14.8%, nearly doubling the 7.9% rise of the

S&P 500


Last week, I

asked readers to suggest some fantastic undiscovered small-cap fund managers. The managers they came up with aren't exactly unknowns, but they are certainly worth mentioning.

Robert Zelman


Irene Hoover

. "I don't own her fund, but I like her," he said. Hoover runs her own aptly titled firm,

Hoover Capital Management

, and manages the


Forward Small Capitalization Stock fund.

Some investors might be wary of a fund that only opened last October, but Hoover has been a small-cap investor for years, using a combination value/growth style.

While working at

Jurika & Voyles

, the firm she left in 1997 to found her own shop, Hoover posted some fabulous numbers on the

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Jurika & Voyles Mini-Cap fund. From its October 1994 inception through September 1997, the fund was the best-performing diversified equity fund tracked by


, with an average annual return of 43.1%.

Past performance isn't supposed to tell you anything about the future, but those old numbers do look awfully attractive.

With her new fund, Hoover isn't at the head of her class, but so far her numbers are more than acceptable. Since the fund's October inception, it's up 25.8%. For 1999 through July 1, it has climbed 10.4%, compared with 8.8% for the average small-cap fund, according to Lipper.

Other vitals: The fund carries an expense ratio of 1.45% and its median market cap is $725 million, according to


. The fund's assets are just $47 million -- a good sign. Asset levels are a key consideration in this sector. The bigger a small-cap fund gets, the harder it is for the fund to limit its investments to small companies.

For more information on the fund, visit the Forward Funds Web site at Or you can read a story about Hoover that I

wrote last year.

Bruce Munn

wrote in to praise the


Bridgeway Micro-Cap Limited fund but asked me not to mention it in my column because it will close if the assets hit a certain level. Sorry, Bruce.

Right now, this small quantitative fund, which uses complex computer models to identify buy and sell signals, has about $14.1 million in assets. The firm will close the fund to new shareholders when assets hit $27.5 million and to all shareholders when assets reach $55 million.

Like the name says, manager John Montgomery buys micro-cap stocks, defined as stocks with market caps equivalent to the size of the second-smallest 10% of those listed on the

New York Stock Exchange


For 1999, the fund's 19.5% return trails the 20% average for micro-cap funds tracked by Lipper. The fund has been around only a little more than a year, but its 12-month return of 28.6% does beat its peer average of 17.6%.

Other essentials: Its expense ratio is 1.55%. Its median market cap is $212.9 million. The Bridgeway Web site can be found at It's not pretty, but you might be able to find what you need.

One reader asked, "What are your thoughts about

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Third Avenue Value?" I could write a book about this fund. In fact, the fund's manager, Marty Whitman, just published his own book called

Value Investing: A Balanced Approach

. I'll see what I can cram into a few lines.

This man is a Jedi Master of deep-value investing. But value has not been the place to be recently, and the fund's returns show it. For the 1999, the fund has returned 5.2%, compared with a 7.7% price rise (excluding reinvested dividends) for the Russell 2000 index. Its five-year average annual return is 17.4%, compared with a 13.6% average annual price rise for the Russell.

The fund has the flexibility to invest outside of U.S. small-caps. At present, the fund has about 10% of its assets in super-large-cap Japanese stocks, Whitman says. If you want a purer small-cap fund and like the Third Avenue style, look at the

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Third Avenue Small-Cap Value fund, co-managed by Curtis Jensen, one of Whitman's heirs apparent.

Does that mean Whitman, who's in his mid-70s, is retiring soon? "No. Are you kidding?" he says.

Some might argue Third Avenue Value is too big to be a small-cap fund. It has $1.4 billion in assets, which, says Whitman, "is not enough." The fund's median market cap is $1.06 billion. Its expense ratio is 1.08%.


Jennifer Bingham

suggested that I check out Jim Kaplan of

J.L. Kaplan Associates

in Boston. Who?

Kaplan, along with colleague Paul Weisman, manages the

Undiscovered Managers Small Cap Value

fund. This fund, started at the beginning of 1998, invests primarily in companies with a market float (shares publicly traded) of $1.2 billion or less. This year, the fund is up 13.7%, well ahead of the Russell 2000.

The fund has just $16.8 million in assets. Better yet, it is expected to close to new investors when assets hit approximately $350 million. Its expense ratio is 1.4%.

Unfortunately, this fund is not readily available to the average investor. Unless you can meet the Undiscovered Managers' $250,000 investment minimum, you'll have to buy the fund through a financial adviser. You can visit the Undiscovered Managers site at

Another reader, who didn't sign a name, wrote in to praise the


O'Shaughnessy Cornerstone Growth fund as having "the most intelligent approach to investing that I know about." This 50-stock quant fund, run by Jim O'Shaughnessy, won't own stocks smaller than $172 million in market cap. However, the fund's median market cap is $927.6 million, which puts it clearly in the small-cap arena, according to Morningstar. It's up 8.1% this year.

Other basics: The expense ratio is 1.16%. You can visit the firm's Web site at

Lastly, a person who identified himself as an employee of

MAS Funds

(owned by

Morgan Stanley Dean Witter


) sent an email suggesting I look at -- no surprise -- one of the MAS funds, specifically the


MAS Small Cap Value fund. The fund has a good track record. Its five-year average annual return is 20.1%, well ahead of the small-cap fund average of 16.6%.

Its assets are at $918.9 million, and its expenses are a low 0.86%.

Speak Up, People

Last week, I

wrote about the how the

Investment Company Institute's

recommendations to strengthen the independence of fund boards could be improved. And I asked readers to send in their own suggestions for better practices.


Not a word.

Maybe I should refrain from addressing the topic any further, stop saying that investors should indeed care what their boards are doing and end my rants for greater transparency.

If shareholders don't care, who does, right?

Dear Dagen aims to provide general fund information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities. has a revenue-sharing relationship with under which it receives a portion of the revenue from Amazon purchases by customers directed there from