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Royce Pennsylvania Mutual (PENNX)
1-year return: -7.9%
5-year return: 15.1%
Expense ratio: 0.88%
ETF alternative: Vanguard Small Cap Value (VBR)

For more diversification and growth, don't forget the munchkins (stocks, that is). Royce Pennsylvania Mutual, led by Chuck Royce himself, is a stellar choice. "There's a very experienced manager at the top who knows how to trade small-cap stocks in various cycles," says Morningstar senior fund analyst Bridget Hughes. The fund's 12% average annual return over 15 years puts it in the top third of its peers. The ETF alternative: Vanguard Small-Cap Value.

NEXT: Pimco All-Asset (PASDX)
Last updated June 20 2008: 2:34 PM ET
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