U.S. small-cap stocks are one of my favorite places to invest. That’s why I have invested 100% of my son's 529 college fund in a low cost Vanguard small-cap index fund, asserts Nicholas Vardy, editor of The Global Guru.

I’m not alone in my penchant for small-caps. David Swensen, the head of the Yale University endowment, pointed out that between June 1932 and the end of 2006, the value of U.S. small-cap stocks soared 15,900-fold.

That return compares with a return of 19 times principal for an invetment made in U.S. government T-bills.

I track 44 small-cap exchange-traded fund strategies on a daily basis. Here are the top three best-performing strategies versus the S&P 500 for 2016 year to date:

Guggenheim S&P SmallCap 600 Pure Value ETF (RZV)

The Guggenheim S&P SmallCap 600 Pure Value ETF tracks a fundamentally weighted index of U.S.-listed small-cap value companies. It owes its strong performance to increased investment in microcap stocks.

With a nod to its value investing label, the fund invests in stocks with low price-to-book ratios. It currently overweights consumer cyclicals and industrials, while underweighting financials.

Overall, this ETF is more volatile than most small-cap funds. However, it rewards you on the upside if you can endure the wilder ride. Year-to-date, the fund has posted a total return — including dividends — of 40%.

PowerShares Russell 2000 Pure Value ETF (PXSV)

The PowerShares Russell 2000 Pure Value ETF tracks an index of U.S. value stocks, ranked by size, from 1,001 to 3,000 by market cap. Stocks are selected and weighted by price-to-book historical sales growth and growth forecast.

PXSV changed indexes in May 2015. It now invests in stocks with stronger value characteristics than traditional Russell value indexes and remains one of the pure value play funds in the small-cap world. Year to date, the PXSV has posted a total return (including dividends) of 37.40%.

ProShares Russell 2000 Dividend Growers (SMDV)

SMDV tracks an index of U.S. small-cap stocks with a 10-year record of increasing dividends. Stocks are equally weighted.

The idea is that small firms with a proven record of increasing dividends deliver stable growth. With only about 50 names from a 2,000-stock universe, the situation highlights how few companies make the cut.

As such, SMDV targets a narrow slice of the small-cap market rather than offering broad coverage of the entire small-cap space. Year to date, SMDV has posted a total return (including dividends) of 37.02%.

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