A small-cap fund focuses on firms that are relatively small and somewhat overlap capital appreciation funds.

Question

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Small-cap funds invest in small companies with a market capitalization of generally less than $2 billion. These companies may have more potential for growth but also come with a higher risk. Capital appreciation funds, on the other hand, aim to grow the value of their investments over time but may invest in larger, more established companies. While there may be some overlap in the types of companies they invest in, small-cap funds generally have a narrower focus on smaller companies.

A Small-Cap Fund Focuses on Firms That Are Relatively Small