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Best of Funds

Investors having a high risk appetite and looking for significantly high returns often choose small-cap funds. These funds diversify the risk inherent in small cap stocks and have high growth potential. Since they focus on small cap companies there is the added advantage of higher flexibility due to the quicker decision making of these firms. Investors willing to remain invested for longer periods who can withstand high volatility should invest in small cap funds to earn substantially profits.

Below we will share with you 5 top rated small-cap mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all small-cap funds, investors can click here to see the complete list of funds.

Mutual Fund

Zacks Rank

Total Return YTD

ProFunds UltraSmall Cap Investor

#3 Hold

 

34.03%

Bridgeway Ultra-Small Company

#1 Strong Buy

 

28.60%

Pacific Advisors Small Cap Value A

#1 Strong Buy

 

28.18%

Calvert Small Cap A

#1 Strong Buy

 

22.66%

Franklin Small Cap Growth A

#1 Strong Buy

 

22.65%

 

ProFunds UltraSmall Cap Investor (UAPIX - MF report) seeks to provide daily returns which are twice as much as the daily performance of the Russell 2000 Index. The fund purchases equity securities and derivatives which have similar return characteristics. This small-cap mutual fund is non-diversified and has returned 65.36% over the last one year period.

The small-cap mutual fund has a minimum initial investment of $15,000 and an expense ratio of 1.89% compared to a category average of 1.31%.

Bridgeway Ultra-Small Company (BRUSX - MF report) invests a large share of its assets in a wide range of “ultra-small companies”. A maximum of 15% of its assets are invested in foreign instruments. This small-cap mutual fund returned 50.51% over the last one year period.

The fund manager is John Montgomery and he has managed this small-cap mutual fund since 1994.

Pacific Advisors Small Cap Value A (PASMX - MF report) seeks capital growth. The fund invests the majority of its assets in small cap companies. These firms must have a market capitalization not exceeding $2 billion. This small-cap mutual fund returned 42.71% over the last one year period.

As of March 2013, this small-cap mutual fund held 30 issues, with 5.39% of its total assets invested in Saia, Inc.

Calvert Small Cap A (CCVAX - MF report) invests in small cap domestic companies whose market cap is less than $3 billion. The fund invests a maximum of 25% of its assets in securities issued by foreign companies. This small-cap mutual fund returned 38.27% over the last one year period.

The small-cap mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.69% compared to a category average of 1.31%.

Franklin Small Cap Growth A (FSGRX - MF report) seeks capital growth over the long-term. The fund invests the majority of its assets in domestic equity securities issued by small cap firms whose market cap is not more than $1.5 billion or lower than the company with the highest market cap in Russell 2000 Index, whichever is higher. This small-cap mutual fund returned 31.41% over the last one year period.

The fund manager is Michael McCarthy and he has managed this small-cap mutual fund since 2000.

To view the Zacks Rank and past performance of all small-cap mutual funds, investors can click here to see the complete list of funds.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.

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