Small-cap funds with the best 10-year returns

Similar to large-caps, funds tracking smaller companies found success over the past decade in growth stocks.

The 20 top-performing small-cap funds of the last 10 years recorded an average return of 16.11%, Morningstar Direct data show. This year, the same funds notched an average gain of more than 35%.

“There’s no surprise that all of the top-performing small cap funds are growth funds, since growth has outperformed value by significant amounts for a long time,” says Albert Brenner, director of asset allocation strategy at People’s United Advisors.

For comparison, index trackers such as the SPDR S&P 500 ETF Trust (SPY) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) generated 10-year returns of 13.93% and 12.93%, respectively. This year, SPY and DIA had gains of 12.8% and 5.3%.

In bonds, the iShares Core U.S. Aggregate Bond ETF (AGG) had gains of 6.61% and 3.61% over the YTD and 10-year periods.

All of the funds in the top 20 outperformed the industry’s biggest small-cap fund. With a net expense ratio of 6 basis points and $49.8 billion in AUM, the iShares Core S&P Small-Cap ETF (IJR) had a YTD loss of 1.35% and 10-year gain of 11.79%, data show.

For their outperformance, these funds carried fees well above their industry peers. With an average net expense ratio of 114 basis points, the best-performing small-cap funds were more than twice that of the 0.45% investors paid for fund investing last year, according to Morningstar’s most recent annual fee survey.

“Generally speaking, the small-cap world is a place that can reward good, disciplined research,” Brenner says, adding that small-cap stocks often involve just a handful of analysts. “The lack of analyst coverage makes the space much less efficient. Good research and expert judgment is more readily rewarded in this space.”

Scroll through to see the 20 small-cap funds with the best 10-year returns through Nov. 16. Funds with less than $100 million in AUM were excluded, as were funds with investment minimums above $100,000, leveraged and institutional funds. Assets and expense ratios, as well as YTD, one-, three- and five- returns are also listed for each. The data show each fund's primary share class. All data is from Morningstar Direct.

FP111720_20 copy.png
Janus Henderson Venture D (JANVX)
1-Yr. Return: 21.08%
3-Yr. Annualized Return: 13.63%
5-Yr. Annualized Return: 13.46%
FP111720_19 copy.png
Alger Small Cap Growth A (ALSAX)
1-Yr. Return: 50.61%
3-Yr. Annualized Return: 24.51%
5-Yr. Annualized Return: 21.01%
FP111720_18 copy.png
Hartford Small Company HLS IA (HIASX)
1-Yr. Return: 42.11%
3-Yr. Annualized Return: 22.85%
5-Yr. Annualized Return: 18.14%
FP111720_17 copy.png
Buffalo Small Cap (BUFSX)
1-Yr. Return: 48.64%
3-Yr. Annualized Return: 24.49%
5-Yr. Annualized Return: 20.41%
FP111720_16 copy.png
Putnam Small Cap Growth A (PNSAX)
1-Yr. Return: 39.23%
3-Yr. Annualized Return: 22.77%
5-Yr. Annualized Return: 18.16%
Front Load: 5.75%
FP111720_15 copy.png
Alger Small Cap Growth I-2 (AASOX)
1-Yr. Return: 52.84%
3-Yr. Annualized Return: 25.04%
5-Yr. Annualized Return: 21.58%
FP111720_14 copy.png
American Century Small Cap Growth Investor (ANOIX)
1-Yr. Return: 42.94%
3-Yr. Annualized Return: 22.02%
5-Yr. Annualized Return: 19.26%
FP111720_13 copy.png
Wells Fargo Fundamental Small Cap Growth A (EGWAX)
1-Yr. Return: 51.23%
3-Yr. Annualized Return: 25.56%
5-Yr. Annualized Return: 20.52%
Front Load: 5.75%
FP111720_12 copy.png
Wasatch Core Growth (WGROX)
1-Yr. Return: 26.69%
3-Yr. Annualized Return: 18.23%
5-Yr. Annualized Return: 16.95%
Redemption Load: 2%
FP111720_11 copy.png
VALIC Company I Small Cap Aggressive Growth (VSAGX)
1-Yr. Return: 32.66%
3-Yr. Annualized Return: 17.85%
5-Yr. Annualized Return: 16.83%
FP111720_10 copy.png
Wasatch Small Cap Growth Investor (WAAEX)
1-Yr. Return: 47.19%
3-Yr. Annualized Return: 27.58%
5-Yr. Annualized Return: 20.43%
Redemption Load: 2%
FP111720_09 copy.png
Fidelity Small Cap Growth (FCPGX)
1-Yr. Return: 27.66%
3-Yr. Annualized Return: 17.63%
5-Yr. Annualized Return: 17.61%
FP111720_08 copy.png
Invesco Discovery A (OPOCX)
1-Yr. Return: 42.59%
3-Yr. Annualized Return: 22.33%
5-Yr. Annualized Return: 19%
Front Load: 5.50%
FP111720_07 copy.png
Buffalo Early Stage Growth Fund (BUFOX)
1-Yr. Return: 30.72%
3-Yr. Annualized Return: 18.3%
5-Yr. Annualized Return: 18.2%
FP111720_06 copy.png
Lord Abbett Developing Growth A (LAGWX)
1-Yr. Return: 57.35%
3-Yr. Annualized Return: 30.19%
5-Yr. Annualized Return: 21.07%
Front Load: 5.75%
FP111720_05 copy.png
VALIC Company II Small Cap Growth (VASMX)
1-Yr. Return: 46.71%
3-Yr. Annualized Return: 24.96%
5-Yr. Annualized Return: 22.92%
FP111720_04 copy.png
AB Small Cap Growth Advisor (QUAYX)
1-Yr. Return: 43.83%
3-Yr. Annualized Return: 24.7%
5-Yr. Annualized Return: 21.5%
FP111720_03 copy.png
Wasatch Micro Cap (WMICX)
1-Yr. Return: 55.72%
3-Yr. Annualized Return: 30.92%
5-Yr. Annualized Return: 25.77%
FP111720_02 copy.png
Wasatch Ultra Growth (WAMCX)
1-Yr. Return: 68.8%
3-Yr. Annualized Return: 34.43%
5-Yr. Annualized Return: 27.4%
FP111720_01 copy.png
Virtus KAR Small-Cap Growth I (PXSGX)
1-Yr. Return: 39.11%
3-Yr. Annualized Return: 29.34%
5-Yr. Annualized Return: 28%
MORE FROM FINANCIAL PLANNING