Mutual fund investors made one thing clear in the first quarter of 2011: They put their trust in small-cap and mid-cap strategies to power economic growth and provide stability. Small-cap growth funds enjoyed a 9.2% run, while mid-cap growth funds rose 7.8%. Small-cap and mid-cap blend funds were both ahead 7.9%.
"People thought large caps would come back and beat small caps," says Russ Kinnel, director of mutual fund research at Morningstar. "By a lot of measures blue-chip stocks are cheap, but that does not always translate to a single quarter's solid performance."
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