Our top-rated Canadian small/mid-cap funds

Medallist ratings go to active managers.

Craig Sebastiano 23 November, 2016 | 6:00PM
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Some investors like to allocate a portion of their portfolio to companies with smaller market capitalizations because they tend to grow at a faster pace than their larger peers. Superior earnings growth can lead to higher stock returns.

That's definitely been the case as of late. On a year-to-date basis (as of Nov. 15), the S&P/TSX Smallcap Index has jumped 24.9%, more than double the S&P/TSX Composite Index's 12.2% gain.

However, smaller-cap stocks tend to be riskier than the large-caps. They're less widely followed by equity analysts than large-cap companies, and bid-ask spreads on small-cap stocks are wider because their trading volumes are lower.

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About Author

Craig Sebastiano

Craig Sebastiano  Craig Sebastiano is a freelance writer based in Toronto. He writes about topics related to personal finance, investing, retirement and real estate. He has worked at BNN, Benefits Canada and StockHouse.

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