Microcap Funds Climbed 5.54% During August --- Group Claimed No. 1 Spot Among Equity Stocks; Lack of Sellers Is Cited
NEW YORK -- Small was beautiful in August as microcap stock funds picked up steam and posted the best returns among domestic equity funds.</br></br>However, investors may not want to build their hopes too high for microcap funds, which typically invest in companies with market capitalizations of less than $300 million. Observers say the sector's gains weren't so much the result of increased buying of microcap stocks, but rather a lack of selling as the rest of the stock market headed lower.</br></br>According to Lipper Analytical Services Inc., microcap funds provided investors with a 5.54% return in August. And while that was the smallest monthly gain for the group since April, it topped all other categories of equity funds during August. The closest sector was small-cap funds, which posted a 1.83% gain for the month.</br></br>Funds that had been the big winners all year -- funds tied to the Standard & Poor's 500-stock index -- were the big losers among domestic stock funds in August, dropping 5.59%.</br></br>Over the past 13 weeks, microcap stocks are well ahead of all other domestic equity funds, with a nearly 19% gain since June 6. S&P 500 funds are up 10.66% in the same period. Growth funds, which tend to invest in larger companies, are up 12.21%.