Small Caps Still Muscle the Market

May 7, 2002 ( - The beat goes on for small-cap value fund investments, according to Standard & Poor's, with a third consecutive year of strong showings.

Through April, small-cap value funds gained a whopping 9.56%, which allowed the asset class to keep its honor as the leading domestic equity fund category. In fact, S&P said, every other domestic equity fund category except for mid-cap value and small-cap blend funds is in negative territory for the year.

According to S&P, the average domestic stock fund is off 3.88% through April compared to the S&P 500 Index, which dropped 5.88% during the period.
Worst performers among domestic equity fund categories are those relying on a growth style.

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The large-cap growth, small-cap growth, and mid-cap growth fund styles have respectively returned  -8.50%, -5.53%, and -4.87%, through the end of April, S&P reported.

Through April, mid-cap value funds averaged a 3.84% return while mid-cap blend funds turned in an average -1.21% in the same period.

The market can expect that small- and mid-cap value stocks will continue to outperform other sectors in coming months, S&P said, because investors consider many growth issues to be too pricey.