Small-cap funds have outpaced large-cap funds for the past five years and small-cap portfolio managers expect their win streak to continue, USA Today reports.
After returning 90% in the past five years versus 39% for the average fund, small-cap funds continued to outpace other funds in the first quarter of this year. In the first three months of 2006, small-cap funds rose12.1%, versus the average funds' 6.6% return.
What's causing portfolio managers of these funds to swagger? Even though the Fed funds rate is 4.75%, interest rates are still relatively low. And even smaller companies are benefiting from global growth.
But, some small-cap skippers admit, particularly those who run value funds, finding stocks at reasonable prices is becoming a bit harder.
