Investors who are less exposed than they would like to small businesses can look to Morningstar’s Short List of Best Small Cap Mutual Funds and Exchange Traded Funds – those funds with at least one winning share class. a analyst note Golden.

On this list, investors will find both index funds and active managers.

Passive strategies have several advantages, Susan dziubinski, Content Director for Morningstar.com, wrote in a recent blog post.

First, their cost advantage: All of Morningstar’s Gold-rated passive funds have below-average expense ratios, giving them fewer hurdles to overcome to generate returns.

Second, passive strategies tend to be more tax efficient than active strategies, which is an advantage for investors in taxable accounts. Third, passive strategies are less threatened by asset growth than active strategies.

According to Dziubinski, the small cap share of the market is an area where some active managers have been able to add value compared to their respective indices. But only three active funds on the shortlist are accepting money from new investors; the other actively managed funds on the list are closed to new investors.

Dziubinski writes that it is not surprising that some of the actively managed funds rated Gold are shutting down. Why?

Capacity is essential for many small cap funds to maintain their approaches. The best small-cap funds close or limit new investments from time to time to keep their purpose intact.

Morningstar Gold-rated funds focus on either growth stocks or value stocks; neither mixes the two styles. Dziubinski offers suggestions for investors who want broad exposure to small company stocks of the growth and value styles.

One option, she writes, would be to combine one of the active or passive funds in the Low Growth Morningstar category with one of the active or passive options in the Low Value category.

Investors who prefer to invest in a single fund that covers the small cap category, however, can delve into small cap funds rated Silver and Bronze. Morningstar.com Premium Members can access a comprehensive list of all small caps mutual fund medalists and ETF medalists.

See the gallery for the 11 small-cap funds on Morningstar’s shortlist.