Investors often choose small-cap funds to magnify the impact of market rallies on their holdings. But the chance for sharp gains brings the risk of big drops, too. For the risk-averse who still want in on the potential that small caps offer, there are funds like Royce Special Equity Fund . For most of his long investing career, manager Charles Dreifus says, he has sought companies with strong balance sheets, steady cash flow and dividends. His