If the doctors are right about the due date, this time next month I'm going to be a first-time dad. My wife, Kristin, and I have been married for over 16 years, but we've put off this joyous occasion for quite a while because we wanted to make sure that we felt "ready" -- a proposition to which I can now officially say: Ha! Fat chance.

Seriously, does any couple ever feel ready for the first child? Sure, we've spent the last eight months preparing ourselves for the arrival of little Penelope Louise (a.k.a. Penny Lou). We've painted and furnished her room and helped Amazon (NASDAQ:AMZN) turn a tidy profit by purchasing enough children's books to fill a small library. And to say the least, child-rearing advice has been, um, plentiful. But do we actually feel ready for her? No way. It's hard to feel prepared when you don't know what, exactly, to expect.

Plans and provisions
And if you can believe it, that has got me thinking even more than usual about mutual funds. No, really. Whenever I feel overwhelmed and out of my depth (like right now, for instance), I like to contemplate the things I do know something about. That's a pretty short list, I can assure you, but I do know a thing or two about funds. I also know that Kristin and I want Penny to feel confident about her financial future. To that end, we're making plans and provisions already. College savings plans (such as 529s and Coverdells) are certainly in her future, and so too is a taxable account invested primarily (and probably exclusively) in mutual funds.

Our big-picture financial goal for Penny is for her to be able to stop working whenever she wants to. Let me hasten to say that's not because we want to put her on Easy Street, either. No, our main motivation is that we want to free our daughter to pursue a career that she sincerely cares about. A job you love is a gift. If you take the need for money out of the employment equation, the chances of finding one increases exponentially. That's our theory anyway -- and we're sticking to it.

A small-cap favorite
So, right now I'm fund shopping for Penny Lou. I'm thinking about the long haul, of course, and -- also of course -- I'm applying the criteria that I use in Champion Funds with the kind of spastic energy that some parents reserve for yelling at the umpire during Little League games. This is my sport, after all. I haven't made the final cut yet -- who's good enough for my yet-to-be-born daughter? -- but one fund that's certainly in the running is Royce TrustShares.

For starters, this fund hails from one of my favorite shops. Chuck Royce hung the firm's shingle back when Nixon was in the White House. Since then, his shop has earned a well-deserved reputation for excellence when it comes to running small-cap money. Royce boasts more than a dozen open-end small-cap funds, and if you're looking to increase your exposure to the market's smaller fish, most of them deserve a spot on your short list.

TrustShares is actually managed by Chuck Royce himself, but the fund is getting my attention mainly because, in addition to the facts that it has a) walloped the S&P 500 since its 1995 inception; and b) lost money in only one calendar year, the fund allows Kristin and me, as the donors, to define the term of the trust. That is, rather than being beholden to some arbitrary notion of "age of majority," we can decide when the money gets doled out to our daughter.

I'm a big fan of that flexibility. We certainly don't intend to keep this fund a secret from Penny Lou -- she could easily Google me and find out all about it -- but I do like the fact that we can set a post-college date for the distribution of its assets. Kristin and I are both pretty bookish, and we're hoping that Penny will be, too. (Thus the small fortune we've spent on kiddie lit.)

The choice is hers
But even if she doesn't opt to go to grad school, Penny Lou can rest assured there's probably going to be a meaningful stash of cash waiting for her after she completes her undergrad degree. If she wants to join the Peace Corps, work for a non-profit, or run away and join the circus, those will all be viable career paths for her. So will earning an MBA and going to work at a Fortune 500 company or, if she chooses, becoming an English prof at my favorite state university. The point is, that critical choice will be hers. And she'll be able to make it, or so we hope, independent of worrying about money.

Without a doubt, Royce TrustShares isn't the only fund Penelope will want to own in her life. Small-cap stocks are notoriously volatile, and at some point, she'll want to anchor her portfolio with a fund (or group of funds) that invests in large-cap staples such as Microsoft (NASDAQ:MSFT), Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and Citigroup (NYSE:C). Heck, maybe she'll even go the ETF route and snap up shares of Diamonds (AMEX:DIA) or Spiders (AMEX:SPY).

But you know what? We plan to let her make that call when the time seems right. Picking small-cap champs is a tougher task than finding large-cap stalwarts. And at any rate, when your dad's a fund analyst, you can always ask him what he thinks.

Right, Penny?

Shannon Zimmerman, editor and analyst for Motley Fool Champion Funds, is now virtually certain that father really does know best. Heowns shares of Diamonds, and you can test drive his newsletter for free by clicking here. The Motley Fool has a disclosure policy.