Small-cap growth investing poses specific challenges to investors, such as higher volatility, lower liquidity, and less readily available information. Ken Korngiebel, the manager of Columbia Small Cap Growth Fund I, believes that the crucial factors for success include a longer-term horizon, a research team with diversified perspectives, valuation of both upside and downside potential, and risk management in which every bet is intentional.

For Michael J. Chren, team leader for the Allegiant Asset Management Large Cap Value equity styles, value investing is a superior strategy because though markets tend to be efficient over the long term, it is critical to take advantage of short term pricing inefficiencies. His strategy does just that. Value stocks are not necessarily those with low P/Es, but those trading at least 25% below their intrinsic value. The critical variable is how to measure intrinsic value.

Seeking long-term capital appreciation through investments in mid-sized growth companies is part of the philosophy of the Mosaic Mid-Cap Fund. Richard Eisinger, co-manager of the fund, believes that businesses with sustainable competitive advantages and predictable cash flow prove to be less risky in the long run. The fund prides itself on avoiding the herd mentality and thus limiting risk.

A pioneer in the area, Alpha Hedged Strategies (ALPHX) defies easy comparisons. The fund employs real hedge fund managers with various strategies to create a risk-return profile suitable for mass affluent mutual fund investors. Through tight control over sub- managers and compliance with mutual fund requirements, Alpha eliminates many of the hurdles between these two worlds. Financial intermediaries are crucial to educating investors on this complex product.