8.25Small-cap funds
1What is it?
Small-cap funds invest at least 65% in companies ranked 251 and below.
2Why does it exist?
Highest growth potential and highest volatility. Falls of 40–60% have happened.
3Diagram
| Invests in | Suits | Risk | Suggested horizon |
|---|---|---|---|
| Rank 251+ (65%+) | Experienced, patient investors | Very high | 7–10+ years |
4Quick revision
- Small-cap funds invest at least 65% in companies ranked 251 and below.
- Risk: Very high.
- Horizon: 7–10+ years.
5Knowledge check
Q1. Small-cap ranks?Show answer
251 and below.
Q2. Typical risk?Show answer
Very high.
Q3. Should small caps be your first fund?Show answer
Generally not.
See it live on MojoStox