These small caps can bring big returns: Portfolio manager

Small caps, big returns

Small-cap stocks have been on a roll but that doesn't mean there aren't still opportunities to make money, portfolio manager Chris Retzler said Tuesday.

Concerns about Greece and its debt problems don't weigh on small caps and the stocks are less exposed to currencies, Retzler said in an interview with CNBC's "Closing Bell."

However, with the Russell 2000 hitting another record high Tuesday, investors must be choosy when it comes to deciding where to invest.

There are a lot of opportunities in small-cap growth companies "where you're picking good managements, good product cycles, real secular growth," the Needham Small Cap Growth Fund manager said.

"It's really stock picking."

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Small-caps have been traditionally hurt by rising interest rates, and the Federal Reserve could make its first rate hike this year. Because of that, Retzler would stay away from levered companies.

Among the names he likes is Ruckus Wireless, which just announced an alliance with Juniper Networks. Also in the space, Hewlett-Packard recently announced it would buy Aruba Networks, which provides network access solution for mobile enterprise.

"This is the market share shift that we've been waiting for. We think this is a great opportunity in the wireless LAN business for enterprises," said Retzler.

He also likes Entegris and MKS Instruments.

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Disclosure: Needham Funds owns shares of Ruckus Wireless, Entegris and MKS Instruments.