Article: Investments - Rally Or Regression? While small-cap stocks are beating the S&P 500 Index, gains are uneven and some fear the rally will be short-lived.

Small-company fund managers say the small-cap premiuma period of five years or so when large-caps lag small-capshas arrived. But given the recent problems of the asset class, few financial professionals would be surprised if they are disappointed again.

"Small-caps certainly seem to be on the rise," says Gerald Moran, manager of the Kemper Global Discovery Fund, which was up some 64.15% last year. So far this year it's been more of the same. The fund was recently up for the year by some 28%.

Despite depressed valuations of many small-cap companies outside the technology sector, encouraging signs are surfacing in the asset class. Merger fever has invaded ...

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