In recent issues, we have covered the topic of small caps vs. large-cap stocks. History suggests that small caps should outperform during the initial phase of a bull market, and the rally this year has been no exception. Indeed, many of the leading advisors continue to believe that small caps are the place to be. Here's a trio of votes--from Jim Lowell, Jim Stack, and Donald Rowe--for small-cap mutual funds.

Lowell, JimJim Lowell, editor of The Fidelity Investor , says, "We recommend Fidelity International Small Cap (FISMX), which has the highest levels of technology (21%) and Japan investments (28%) in the group. But what really sets this fund apart is its small-cap orientation. (All of the other diversified international funds from Fidelity are firmly in the large-cap camp.) The one international stock fund we currently own, International Small Cap, is a relatively new stock-picking fund that I think will stand the test of time. Why? First, small-cap companies and stocks are more likely to buck any downward trend in an overall market. And second, whether looking overseas or here at home, smaller firms are more likely to be priced inefficiently than are the blue chips, meaning active management can make more of a difference (for good or ill) on the small-cap side of the fence."

Stack, James"As we've stepped up our invested position this year, our focus has been on small to mid-cap stocks and mutual funds since these categories have historically led the way in a new bull market," says Jim Stack, in his InvesTech Research Mutual Fund Advisor . "Small-cap stock held in the Heartland Value Fund (HRTVX) and Pennsylvania Mutual (PENNX) represent 40% of our invested fund position. An additional 30% is allocated to mid-cap stocks through the T. Rowe Price Mid-Cap Growth Fund (RPMGX). With over 70% of our recommended fund portfolio falling  in the small to mid-cap arena, we're well positioned if this recovery follows historic precedent and these stocks outperform in the early stages of a bull market, as they have in the past."

Rowe, Donald"Like all powerful new bull markets, this one refuses to pull back long enough for doubters to climb aboard," says Donald Rowe, editor of The Wall Street Digest." The new wave of the technology revolution is the unchallenged leader of this bull market, and small capitalization stocks are once again the place to be.The S&P 500 index and the Dow industrials are lagging the smaller cap indices. It is now abundantly clear that small caps and technology stocks will lead the new bull market for coming years. Consequently, I believe everyone should own the Profunds Ultra Small Cap fund (UAPIX ), which--through leveraged--seeks to return 200% of the Russell 2000 index. This fund is the top performing index fund since the March bottom, having gained 85% since 3/12/03."