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For investors looking for diversification across different sectors and companies, small-cap funds would be a good choice. These funds invest in different small cap firms from various sectors, as a result of which the risk gets diversified. Investors willing to get significantly high returns and having a high risk appetite should invest in these funds. As these funds focus on small cap companies it enjoys an additional benefit of higher flexibility because of the quicker decision making of these firms.
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.
Schneider Small Cap Value (SCMVX - MF report) seeks capital growth over the long term. The majority of its assets are invested in small cap stocks which are undervalued. A maximum of 20% of its assets may be invested in foreign securities as well as in American Depositary Receipts (ADRs). This small-cap mutual fund has a one year annualized return of 31.78%.
Arnold C. Schneider III is the fund manager and he has managed this small-cap mutual fund since 1998.
Keeley Small Cap Value A (KSCVX - MF report) invests heavily in common stocks of small cap firms. The market capitalization of these companies must be equal to or lower than $3.5 billion. However, it may invest in companies with higher market capitalizations, if the fund meets other criteria. The small-cap mutual fund has a one year annualized return of 24.54%.
As of December 2012, this small-cap mutual fund held 128 issues, with 1.28% of its total assets invested in LB Foster Company Class A.
Fidelity Advisor Small Cap Value A (FCVAX - MF report) seeks capital growth. The fund invests a large share of its assets in instruments of the small cap firms. It invests in those small cap stocks which are considered to be undervalued. This small-cap mutual fund returned 22.24% over the last one year period.
The small-cap mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.44% compared to a category average of 1.41%.
PNC Small Cap A (PPCAX - MF report) invests heavily in domestic small cap companies. The market capitalization of these companies must be within 100 million and $3 billion or within the range of the Russell 2000 Index. This small-cap mutual fund returned 21.10% over the last one year period.
Gordon A. Johnson is the fund manager and he has managed this small-cap mutual fund since 2004.
Gabelli Small Cap Growth AAA (GABSX - MF report) seeks high capital growth. The fund invests heavily in equity instruments of small cap companies. It predominantly invests in common stocks which have good growth potential. This small-cap mutual fund returned 20.02% over the last one year period.
The small-cap mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.41% compared to a category average of 1.33%.
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.