BOSTON (TheStreet) --- *Riverbed Technology*(RVBD), *FactSet Research
Systems*(FDS), *Acme Packet*(APKT), *Questcor*(QCOR) and
*Tenneco*(TEN) are common holdings of the best-performing small-cap
mutual funds this year.
The shares may have more room to run, given their ascent in the past
month.
In a declaration of growing investor confidence going into 2011,
small-cap growth funds had a barn-burner of a year, returning 27% on
average, double that of the *S&P 500 Index*. The mutual funds are
roaring to a close for the year, rising more than 8% over the past
four weeks.
Small-cap growth stocks are typically shares of young companies with a
market value of up to $2 billion. Forty of 748 small-cap growth mutual
funds have gains of at least 32% this year, according to Morningstar
data, led by *Managers Cadence Emerging Companies Fund*(MECIX), with
an advance of 40%.
Small-cap growth funds have the best returns of all categories over
the past 12 months, edging out small-cap value funds, based on a
Lipper compilation of fund benchmarks. (Growth companies are those
that tend to post faster-than-average earnings growth. Value companies
are viewed as inexpensive and typically carry low price-to-earnings
ratios.)
Small-cap growth funds' managers tend to make little bets on many
companies. As a result, they hold many stocks. And most cast a wide
net, stocking the fund with companies with a range of market values in
hopes that one or two big winners will raise returns and render the
underperformers' inconsequential.
For example, the *UBS U.S. Small Cap Growth Fund*(BISCX) owns shares
of *Bucyrus International*(BUCY), which carries a market cap of $7.3
billion, thanks to the 32% premium that *Caterpillar*(CAT) is paying
in its buyout of the mining-equipment maker. It also holds
teen-clothing retailer *Wet Seal*(WTSLA), which has a $368 million
market value.
Details of the top holdings of five small-cap growth funds follow:
Source: Thestreet.com
