Finding good stocks for small-cap funds may be trickier over the next few years, according to Ric Dillon, manager of the Diamond Hill Small Cap Fund, run by Diamond Hill Investments. "In the 27 years I've been in this business, this is the most difficult period I've ever had finding attractively valued U.S. equities," Dillon told Dow Jones Newswires.

Times have changed since the late 1990s, when investors were focused on technology and blue-chip stocks. Now, the valuation gap between those highly valued stocks and the rest of the pack has narrowed considerably, he said.

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