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Top 5 Small Cap Mutual Funds
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ShareAll equity mutual funds are inherently risky in nature, since they are party to the highs and lows of the equity markets. Yet, some of them come with a greater slice of risk than others and small-cap funds are good examples. These funds invest in equity shares of smaller companies and hope to reap dividends when these firms realize their full potential. Such companies continuously reinvest their profits in search of higher growth but have low liquidity and unproven business models. This also means that they provide higher returns and such funds make good additions to a well diversified portfolio.
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, then click here.
T. Rowe Price Diversified Small Cap Growth (PRDSX) seeks long-term capital growth. The majority of the fund’s assets are invested in small companies which are included in the MSCI US Small-Cap Growth Index. The fund’s top 25 holdings do not represent a significant share of total assets. This small-cap mutual fund returned 19.88% over the last one year period.
The fund manager is Sudhir Nanda and he has managed this small-cap mutual fund since 2006.
Pacific Advisors Small Cap A (PASMX) invests heavily in stocks of small-cap companies with market capitalizations within $2 billion. A substantial share of its assets is used to purchase stocks issued by companies with market capitalizations below $500 billion. This small-cap mutual fund has a ten year annualized return of 8.61%.
The small-cap mutual fund has a minimum initial investment of $1,000 and an expense ratio of 2.49% compared to a category average of 1.42%.
AllianceBernstein Small Cap Growth A (QUASX) seeks capital appreciation. The fund invests heavily in equity securities of small-cap companies with market capitalizations of less than $10 million. This small-cap mutual fund returned 21.99% over the last one year period.
As of August 2010, this small-cap mutual fund held 105 issues, with 1.64% of its total assets invested in TIBCO Software, Inc.
Buffalo Small Cap (BUFSX) invests heavily in common, preferred stocks and related convertible securities of domestic small-cap companies. Not more than 20% of its assets may be invested in ADRs and foreign securities which are traded on U.S. stock exchanges. This small-cap mutual fund has a five year annualized return of 3.46%.
The fund manager is Kent Gasaway and he has managed this small-cap mutual fund since 1998.
BlackRock Small Cap Growth Equity A (CSGEX) seeks capital growth over the long term. The fund invests the majority of its assets in domestic small-cap companies. These firms must be within the market cap range of the Russell 2000 index. This small-cap mutual fund returned 9.04% over the last one year period.
The small-cap mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.33% compared to a category average of 1.59%.
To view the Zacks Rank and past performance of all small-cap mutual funds, then click here.
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/mutualfund/
Read the full analyst report on PRDSX
Read the full analyst report on PASMX
Read the full analyst report on QUASX
Read the full analyst report on BUFSX
Read the full analyst report on CSGEX
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| Market Summary | May 26, 2012 08:46 am ET |
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