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4 Small-Cap Funds for Big Upside

A mutual fund or ETF can help to reduce the group's risk

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T. Rowe Price New Horizons Fund

T. Rowe PriceThe T. Rowe Price New Horizons Fund (PRNHX) has a sterling long-term track record. But when a new manager — Henry Ellenbogen — came on board three years ago, there was some trepidation. As it turned out,  though, there was nothing to worry about. During Ellenbogen’s tenure, he has racked up an annual average return of 23.6%.

A key part of his strategy has actually been to invest in pre-IPO companies. A prime example was Workday (WDAY), which has gained over 120% since its IPO in October 2012.

The portfolio is not chock-full of tech operators, though. Rather, Ellenbogen has taken an expansive approach and his investments have spanned diverse industries like consumer cyclicals, industrials, healthcare/biotechs and financial services. Some of the top holdings include Catamaran Corp. (CTRX), Clean Harbors (CLH) and Roper Industries (ROP).

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