10 Stock Picks From Small-Cap Specialist Royce Funds

BOSTON (TheStreet) -- Look at most mutual funds these days and you tend to see the same names in the top holdings, whether they fit in a fund's benchmark or not.

For example, iPad and iPhone maker Apple(AAPL) is owned by almost 4,850 funds, including eight "small-cap" funds.

And with the S&P 500's gain of 11.3% this year, who wants to be left off that gravy train?

But it's clear that the large-cap benchmark is being driven mostly by Apple, which with its 50% gain this year and current $614 share price, makes up 4.6% of the index.

So as goes Apple, so goes the S&P 500, which should give many investors pause. "Some investors are angered by the 500's vulnerability to a Newtonian event: Apple falling to the ground, and the outsized impact that a declining stock price would have on the index," said Sam Stovall, S&P Capital IQ's chief equity strategist, in a market commentary.

But there's a whole other world of investing out there in small- and mid-cap stocks where investors can outdo many of the big guys while adding diversity to their portfolios.