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The Best Small-Cap Mutual Funds to Buy in 2020


Most mutual funds, for better or worse, are made up of large-cap stocks. It's not terribly surprising though since most of the market consists of large-cap names. The S&P 500's cumulative capitalization of around $27 trillion accounts for roughly 80% of the U.S.' total market cap, making it a challenge just finding smaller names to step into. Nevermind the challenge of finding quality, timely analytical coverage of these companies.

The hunt is worth the effort all the same, though. While small-cap stocks tend to be more volatile, they also tend to yield better long-term gains. On average, the S&P 600 SmallCap Index outpaces the large-cap S&P 500 by a couple of percentage points per year. Over time, that small edge can really add up.

Image source: Getty Images.

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Source Fool.com

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