Small-Stock Funds Outpace S&P; in Quarter

Smaller is better when it comes to U.S. equity mutual fund returns for the second quarter ending next week, preliminary data from research firm Lipper Inc. show.

“What you’ve got is almost a symmetrical reversal from prior periods, where it was large market cap that drove performance,” President Michael Lipper said Monday.

Funds that invested in micro-cap companies--those with less than $300 million in market capitalization--have soared an average of 14.1% in the last three months, more than tripling the 4.1% return for funds tied to the Standard & Poor’s 500 index, Lipper said.

Small- and mid-cap funds--those with companies valued between $300 million and $5 billion--also have shined in the quarter, returning 10.3% and 9.2% respectively.