The market's minnows are swimming away from its whales as the Russell 2000 Index is up about 8% compared with the 5% gain in the S&P 500. Ralph Bassett, portfolio manager for the Aberdeen US Small Cap Equity Fund (GSXAX) , said there are a slew of good reasons for the surge in small caps.

"They get more domestic orientation so they have less volatility and overseas revenue. Meanwhile, M&A activity in the sector is holding strong," said Bassett.

The Aberdeen US Small Cap Equity Fund is up 9% thus far in 2016, according to Morningstar. The $310 million fund has returned an average of 10.5% annually over the past three years, outpacing 99% of its rivals in Morningstar's small cap growth category.

Bassett is particularly bullish on Parexel International (PRXL) . Shares of the biopharmaceutical services company, which provides clinical research and logistics, are flat year-to-date. However, Bassett believes Parexel has very healthy long term prospects for revenue and margin improvement.

"Their short term issue is the conversion of their backlog given the higher complexity of trials. They will get through this," said Bassett.

He is also positive on shares of G-III Apparel Group (GIII)  down 37% year-to-date, saying the company's management is strong enough to get through its short term issues surrounding its Donna Karan acquisition.

"We expect those to begin to be cleared up in 2017, which will certainly help sentiment," said Bassett.

Finally, Bassett is a fan of Quaker Chemical (KWR) , up 35% thus far in 2016, saying the company's "robust business model" gives it room for margin expansion.

"Quaker's strong balance sheet will enable it to make acquisitions on the metals side as well," said Bassett about the company which reports it's third quarter results after the market closes next Wednesday.

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