Back to top

Best of Funds

When investors have the willingness to take short term positions and the ability to bear a certain degree of risk, small-cap funds could be the correct choice. These funds generate significant demand driven sales during a market upswing, which lead to an increase in their prices. Smaller firms also look to continuously reinvest their profits back into their business. This reassures shareholders of superior performance and higher profit potential from such companies. Small Cap funds therefore make excellent 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, investors can click here to see the complete list of funds.

Mutual Fund

Zacks Rank

Total Return YTD

Buffalo Micro Cap

#1 Strong Buy

21.0%

Direxion Monthly Small Cap Bull 2X

#1 Strong Buy

19.4%

Huber Capital Small Cap Value

#1 Strong Buy

19.3%

Walthausen Small Cap Value

#1 Strong Buy

18.3%

Oppenheimer Discovery A

#1 Strong Buy

17.9%

 
Buffalo Micro Cap (BUFOX - MF report) invests a large share of its assets in domestic common and preferred stocks and related convertible securities of micro cap companies . These firms are with a market cap of $1 billion or less at the time of purchase. This small-cap mutual fund returned 28.74% over the last one year period.

The small-cap mutual fund has an expense ratio of 1.51% compared to a category average of 1.45%.

Direxion Monthly Small Cap Bull 2X (DXRLX - MF report) seeks monthly investment results twice that of the Russell 2000 Index. The fund invests the majority of its results in equity securities and instruments that give exposure to the index. It may also hold short term debt securities on a day-to-day basis. This small-cap mutual fund returned 20.68% over the last one year period.

The fund manager is Paul Brigandi and he has managed this small-cap mutual fund since 2004.

Huber Capital Small Cap Value (HUSIX - MF report) invests the majority of its assets in common stocks of small cap companies which are attractively priced relative to their underlying value. A maximum of 20% of its assets may be used to purchase ADRs as well as dollar and non-dollar denominated foreign securities. This small-cap mutual fund returned 24.82% over the last one year period.

As of June 2012, this small-cap mutual fund held 46 issues, with 6.46% of its total assets invested in CNO Financial Group, Inc.

Walthausen Small Cap Value (WSCVX - MF report) seeks capital growth over the long term. The fund focuses on purchasing common stocks of small cap companies which have the ability to grow invested capital. The firms invested in must have market capitalizations of $2 billion or lower. This small-cap mutual fund returned 21.3% over the last one year period.

The small-cap mutual fund has an expense ratio of 1.32% compared to a category average of 1.41%.

Oppenheimer Discovery A (OPOCX - MF report) focuses on purchasing common stocks of growth oriented domestic companies. It concentrates on investing in small cap companies, firms with a market cap lower than $3 billion at the time of purchase. This small-cap mutual fund returned 17.14% over the last one year period.

The fund manager is Ronald J. Zibelli, Jr. and he has managed this small-cap mutual fund since 2006.

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.

Please login to Zacks.com or register to post a comment.

If you wish to go to ZacksFunds.com, click OK. If you do not, click Cancel.

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.73 +5.07%
GREEN PLAIN… GPRE 45.56 +3.99%
WEATHERFORD… WFT 23.71 +3.38%
AIR INDUSTR… AIRI 9.86 +2.82%
BANCO DO BR… BDORY 14.29 +2.44%