Few studies explore the micro-cap market of stocks and mutual funds. As a result, little is known about these\nsecuritiesâ?? characteristics, risks and performance. This study analyzes the risk and risk-adjusted performance of microcap\nmutual funds with mid-cap and large-cap mutual funds. The study finds that micro-cap mutual funds are riskier and\nproduce a lower Jensenâ??s alpha than those of mid-cap and large-cap mutual funds. In addition, the author provides a\ncomprehensive literature review and suggests potential explanations for the growing evidence that micro-cap mutual\nfunds are poor investments.
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