Top Small Cap Equity Funds

Today we are featuring top-performing "Small Cap" equity mutual funds, which mainly invest in equity securities of companies with market capitalizations of less than $1 billion.

Investors can find such funds by checking out the entire list of Zacks #1 Rank Small Cap Equity Funds./>

3 Strong Performers

Artisan Small Cap Value (ARTVX) seeks long-term capital growth. It uses a bottom-up investment process to construct a diversified portfolio of undervalued firms that have attractive business models.

The fund invests primarily in common stocks of small U.S. companies with market capitalizations less than three times the weighted average market cap of companies in the Russell 2000 index.

Maximus Inc. (MMS - Snapshot Report), Sanderson Farms Inc. (SAFM - Snapshot Report) and SPSS Inc. (SPSS) are among the fund's top holdings.

Conestoga Capital Advisor Small Cap (CCASX) seeks long-term capital growth through investments in equity securities of small-cap firms, including ADRs, convertible securities, foreign and domestic common and preferred stocks, rights and warrants.

The fund does not expect investment in foreign securities to exceed 20% of the total assets. As of December 2008, its portfolio turnover ratio was 23.12%.

William C. Martindale has been lead manager at the fund since its inception in October 2002. The fund has topped the total returns of its benchmark index in the last 1-, 3- and 5-year periods.

Royce Special Equity Fund (RYSEX) seeks long-term growth of capital using a disciplined value approach and is designed for investors looking at a long-term horizon of at least three years.

The fund focuses on companies with market capitalizations of less than $2.5 billion, focusing on inexpensive companies with high returns on invested capital and low leverage. Although it normally focuses on securities of U.S. companies, the fund may invest up to 5% of its assets in foreign securities.

Unit holders have to make a minimum initial investment of $2,000 to enter this Zacks #1 Rank ("Strong Buy") fund. It pays dividends and capital gains annually.

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

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.

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