Best small-cap funds

 

Best small-cap funds

If you don't want to choose individual small-cap stocks for your portfolio, you can instead gain exposure to small-cap companies by investing in a small cap-focused exchange-traded fund (ETF) or mutual fund. Here are a couple of options:

• iShares Russell 2000 ETF (NYSEMKT:IWM): This ETF tracks the performance of the Russell 2000, which is considered the leading index of small-cap stocks. The fund's managers charge an annual management fee of 0.19%, which works out to $1.90 for every $1,000 invested.
• Fidelity Small Cap Growth Fund (NASDAQMUTFUND:FCPGX): This mutual fund invests in small-cap stocks that have high growth potential. It's actively managed, with the objective of outperforming the Russell 2000, so the fund's fees -- 0.94% annually -- are somewhat high compared to most ETFs.