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Investors with a high-risk appetite and an interest in growth and value investing may choose small-cap blend mutual funds to boost their portfolio. While blend funds, also known as "hybrid funds," aim for value appreciation by capital gains, small-cap funds have higher growth prospects than their large and medium counterparts. Blend funds provide significant exposure to both growth and value stocks, and owe their origin to a graphical representation of a fund's equity style box.
Funds investing the majority of their assets in securities of companies with market capitalization below $2 billion are generally considered small-cap mutual funds. Although funds investing in small-cap stocks are believed to have more exposure to market volatility than large or medium ones, they are also expected to provide diversification across sectors and companies. Moreover, small-cap companies are believed to be less affected by a global downturn, thanks to less international exposure.
Below we share with you three top-ranked small-cap blend mutual funds, namely Vanguard Explorer Value Fund Investor Shares (VEVFX - Free Report) , Penn Capital Special Situations Small Cap Equity Fund Institutional Class (PSCNX - Free Report) and Vanguard Strategic Small-Cap Equity Fund Investor Shares (VSTCX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Vanguard Explorer Value Fund Investor Share invests mainly in small and mid-size U.S. companies, choosing stocks that are considered undervalued, but have above-average dividend yields. VEVFX has returned 13.1% over the past three years.
As of November 2021, VEVFX held 122 issues, with 7% of its assets invested in Total Cash.
Penn Capital Special Situations Small Cap Equity Fund Institutional Class seeks to achieve its objective by investing the majority of its net assets in the equity securities of small-cap companies. PSCNX has returned 22.8% over the past three years.
PSCNX has an expense ratio of 1.09% compared with the category average of 1.21%.
Vanguard Strategic Small-Cap Equity Fund Investor Shares invests in small-cap domestic equity securities based on their return potential. VSTCX selects securities that offer a balance between strong growth prospects and reasonable valuations relative to their industry peers. The fund has returned 14.4% over the past three years.
Cesar Orosco has been one of the fund managers of VSTCX since 2021.
Image: Bigstock
3 Small-Cap Blend Mutual Funds for Great Returns
Investors with a high-risk appetite and an interest in growth and value investing may choose small-cap blend mutual funds to boost their portfolio. While blend funds, also known as "hybrid funds," aim for value appreciation by capital gains, small-cap funds have higher growth prospects than their large and medium counterparts. Blend funds provide significant exposure to both growth and value stocks, and owe their origin to a graphical representation of a fund's equity style box.
Funds investing the majority of their assets in securities of companies with market capitalization below $2 billion are generally considered small-cap mutual funds. Although funds investing in small-cap stocks are believed to have more exposure to market volatility than large or medium ones, they are also expected to provide diversification across sectors and companies. Moreover, small-cap companies are believed to be less affected by a global downturn, thanks to less international exposure.
Below we share with you three top-ranked small-cap blend mutual funds, namely Vanguard Explorer Value Fund Investor Shares (VEVFX - Free Report) , Penn Capital Special Situations Small Cap Equity Fund Institutional Class (PSCNX - Free Report) and Vanguard Strategic Small-Cap Equity Fund Investor Shares (VSTCX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Vanguard Explorer Value Fund Investor Share invests mainly in small and mid-size U.S. companies, choosing stocks that are considered undervalued, but have above-average dividend yields. VEVFX has returned 13.1% over the past three years.
As of November 2021, VEVFX held 122 issues, with 7% of its assets invested in Total Cash.
Penn Capital Special Situations Small Cap Equity Fund Institutional Class seeks to achieve its objective by investing the majority of its net assets in the equity securities of small-cap companies. PSCNX has returned 22.8% over the past three years.
PSCNX has an expense ratio of 1.09% compared with the category average of 1.21%.
Vanguard Strategic Small-Cap Equity Fund Investor Shares invests in small-cap domestic equity securities based on their return potential. VSTCX selects securities that offer a balance between strong growth prospects and reasonable valuations relative to their industry peers. The fund has returned 14.4% over the past three years.
Cesar Orosco has been one of the fund managers of VSTCX since 2021.
To view the Zacks Rank and the past performance of all small-cap blend mutual funds, investors can click here to see the complete list of small-cap blend mutual funds.
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