Rosenbluth

"Investors need to understand why a fund did well or underperformed," says Todd Rosenbluth , a mutual-fund strategist at S&P Capital IQ.

2011's Winners Tank in 2012 Ben Levisohn 2012

"They'll make less money than your average long-only equity fund" during market rallies like those of 2009 and 2010, says Todd Rosenbluth , a mutual-fund analyst at S&P Capital IQ, a unit of McGraw-Hill Cos.

A New 'Alternative' Marshall Eckblad 2011

Mr. Leavell mostly seeks established dividend-paying stocks and he takes a patient, long-term approach, holding some stocks for three or four years, Mr. Rosenbluth says.

Mining for Hidden Gems Among Funds Javier Espinoza 2011

Todd Rosenbluth , mutual-fund analyst at S&P Capital IQ, a unit of McGraw-Hill Cos. in New York, says successful junk-bond investing this year has been a matter of making good micro rather than macro calls.

'Junk' Debt May Not Deserve Its Name Suzanne McGee 2011

"The funds that have done well and likely will continue to do well are those that have identified bonds issued by companies with a strong enough cash flow that a ratings upgrade is foreseeable in the near future," Mr. Rosenbluth says.

'Junk' Debt May Not Deserve Its Name Suzanne McGee 2011

With that in mind, we asked Mr. Rosenbluth and other researchers and advisers to suggest small funds worth a closer look.

Mining for Hidden Gems Among Funds Javier Espinoza 2011

Mr. Rosenbluth says Government Street Equity holds "stocks that we like," including Apple Inc., Philip Morris International Inc., Caterpillar Inc. and Chevron Corp. The fund also buys exchange-traded funds in areas such as midcap stocks and emerging-markets stocks, "so it is getting exposure to other assets in a low-cost way," Mr. Rosenbluth adds.

Mining for Hidden Gems Among Funds Javier Espinoza 2011

Government Street Equity Chosen by Mr. Rosenbluth This $61 million fund has been managed by Thomas W. Leavell since its 1991 inception.

Mining for Hidden Gems Among Funds Javier Espinoza 2011

The strategy has paid off: Through Nov. 28, "its one-year, three-year, five-year and 10-year records are all better than the average return of its large-cap blend peers," says Mr. Rosenbluth.

Mining for Hidden Gems Among Funds Javier Espinoza 2011

Some of these offerings "just don't have the marketing dollars behind them and they are not part of some of the larger fund families people are more familiar with," says Todd Rosenbluth , a mutual-fund analyst with McGraw-Hill Cos.'

Mining for Hidden Gems Among Funds Javier Espinoza 2011