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3 Small-Cap Growth Mutual Funds for Fantastic Returns

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Small-cap growth funds are natural choices for investors with a high-risk appetite when capital appreciation over the long term takes precedence over dividend payouts. These funds focus on realizing an appreciable amount of capital growth by investing in stocks projected to rise in value over the long term.

Small-cap funds are good choices for investors seeking diversification across different sectors and companies. These generally invest in companies having a market cap lower than $2 billion. The companies, smaller in size, offer growth potential, and their market capitalization may increase subsequently. Also, due to their lower international exposure, small-cap funds offer higher protection than their large- and mid-cap counterparts against any global downturn.

Below, we share with you three top-ranked small-cap growth mutual funds, namely AMG GW&K Small/Mid Cap Fund (GWGIX - Free Report) , Boston Trust Walden Small Cap Fund (BOSOX - Free Report) and Invesco Discovery Fund (OPOCX - 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.

AMG GW&K Small/Mid Cap Fund seeks to provide investors long-term capital appreciation. GWGIX invests the majority of its net assets, plus the amount of any borrowings for investment purposes, in equity securities of small-cap and mid-cap companies. It primarily invests in common stocks and preferred stocks.

AMG GW&K Small/Mid Cap Fund has a three-year annualized return of 8.2%. As of June 2022, GWGIX held 84 issues, with 2.7% of its assets invested in Diamondback Energy.

Boston Trust Walden Small Cap Fund invests the majorityof its assets in a diversified portfolio of domestic equity securities of small-cap companies. BOSOX advisors define small-cap issuers as those with market cap within the range encompassed by the Russell 2000A Index at the time of purchase.

Boston Trust Walden Small Cap Fundhas a three-year annualized return of 6.4%. BOSOX has an expense ratio of 1% compared with the category average of 1.03%.

Invesco Discovery Fund aims for capital growth. OPOCX invests the majority of its assets in common stocks of American companies with high growth potential. It mostly focuses on stocks of small-cap companies.

Invesco Discovery Fund has a three-year annualized return of 8.3%. Ronald J. Zibelli Jr. has been one of the fund managers of OPOCX since 2006.

To view the Zacks Rank and the past performance of all small-cap growth mutual funds, investors can click here to see the complete list of small-cap growth mutual funds.

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