This small-cap fund in search of 'misunderstood' growth stories is up 40% this year

Chad Dickerson, Chairman and CEO of Etsy rings the Nasdaq Opening Bell in Celebration of IPO at Nasdaq on April 16, 2015 in New York City.
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One San Francisco-based growth fund is off to a stellar 2020 as its handpicked collection of small-to-mid-cap growth stocks soars past the broader market.

The Osterweis Emerging Opportunity Fund is a concentrated mutual fund that prides itself on finding companies in up-and-coming industries with "significant revenue and earnings growth potential before they are widely discovered."

Put simply, the Emerging Opportunity Fund and manager Jim Callinan are on the hunt for little-known equity gems.

"That's kind of what we look for, are these emerging companies that are mysterious and misunderstood at first. Or they stumble, you know, like Square did," Callinan said. And "they just have to right themselves, or there's some kind of misunderstanding that the Street has on the company. That's our sort of ideal entry point."