Stock funds categories: which range defines Small Cap funds?

• A. $300 million to $2 billion.
• B. $2 billion to $10 billion.
• C. $10 billion and above.
• D. $50 billion and above.

Answer: (A)

Stock fund categories are sometimes defined by the fund’s own size, measured by assets under management. In this framework, small-cap funds are the smaller end of the asset-size spectrum, typically with assets from a few hundred million up to about two billion dollars. This size allows the fund to focus on smaller, less liquid companies that offer higher growth potential but come with greater risk. As a fund grows beyond a couple of billion, it becomes harder to maintain a true small-cap focus, and portfolios tend to skew toward larger, more liquid companies, fitting into mid-cap or large-cap categories. So the range of roughly $300 million to $2 billion best fits the small-cap category.