10 Stocks Boosting Little Funds to Big Returns (Update2)

(Story updated to add that Zynga has filed for a secondary stock offering of up to $400 million.)

BOSTON ( TheStreet) -- There are a handful of small, actively managed mutual funds holding little more than a dozen or so stocks boasting returns north of 22% this year, or more than double the return of the benchmark S&P 500 Index.

Their secret? Old-fashioned stock picking of lesser-known or undervalued companies.

Take, for example, the $20 million Biondo Focus Investor Fund ( BFONX). It's up 37% this year, with a portfolio made up of 13 stocks.

Biondo Focus has a couple of well-known large-caps carrying the load, including everybody's favorite pick, iPhone and iPad maker Apple ( AAPL), and the turnaround stock of the year, Bank of America ( BAC). It also has some under-the-radar stocks. Its latest addition is Nuance Communications ( NUAN), a maker of speech-recognition software.

Then there's the $36 million Berkshire Focus Fund ( BFOCX), up 25% this year. It, too, has big gains on large-cap stocks such as Apple and Internet travel site Priceline.com ( PCLN). The fund initiated new positions in CommVault Systems ( CVLT), Rackspace Hosting ( RAX) and Zynga ( ZNGA) in the past quarter or so. Those stocks posted double-digit returns this year (and are discussed in detail below).

Once-revered fund manager Bill Miller's $1 billion Legg Mason Capital Management Opportunity Fund ( LMOPX ), up 25% this year after losing 35% in 2011, started stakes in NXP Semiconductor ( NXPI) and E*Trade Financial ( ETFC), which have performed strongly this year.

But small-cap stocks aren't the only focus of smaller funds. With a tilt toward large-caps, the $130 million SunAmerica Focused Growth Fund ( SSAAX ), up 21% this year, made a big bet on the biopharmaceutical drug firm Celgene ( CELG) late last year. It also initiated a stake in online broker Charles Schwab ( SCHW).

I screened the Morningstar database for small, actively managed equity funds with returns of at least 20% this year to find some of their newest, top-performing stocks. (Note that the average domestic stock fund is up 12.1%, on average, in 2012.)

Here are summaries of 10 stocks that those funds are buying in inverse order of returns this year:

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