There are two main ideas behind small cap funds. First is they are looking for growth. Small stocks have the room and potential to grow fast and hot. They are the most likely candidates to beat the market growth.

Each mutual fund has it’s own unique investment strategy and approach that it uses. There are two very basic approaches when it comes to many of these funds. One is value funds and the other are growth funds. There are also funds that are a hybrid of the two.

What are ETF funds exactly? Well, ETF is short for exchange traded funds. Many consider is one of the best investments you can make. Let’s start backward and go forward.

First of all, they are funds, in many respects like traditional mutual funds. ETF funds are baskets of securities that are chosen either by a money manager, team of analysts or a computer software program.

Just like mutual funds, they specialize in specific categories of investments and assets. If you get a small cap ETF, it will have small companies in it’s basket. The ease and affordability of these funds make them some of the best investment options around.