Investors with a high-risk appetite and an interest in growth and value investing may choose small-cap blend mutual funds to boost their portfolio. While blend funds, also known as "hybrid funds," aim for value appreciation by capital gains, small-cap funds have higher growth prospects than their large and medium counterparts. Blend funds provide significant exposure to both growth and value stocks, and owe their origin to a graphical representation of a fund's equity style box.
Funds investing the majority of their assets in securities of companies with a market capitalization below $2 billion are generally considered small-cap mutual funds. Although funds investing in small-cap stocks are believed to have more exposure to market volatility than large or medium ones, they are also expected to provide diversification across sectors and companies. Moreover, small-cap companies are believed to be less affected by a global downturn, thanks to less international exposure.
PGIM Jennison Small Company Fund invests most of its net assets in common stock, equity-related securities such as nonconvertible preferred stocks and convertible securities. PGOAX pays out dividends semi-annually and capital gains annually.
PGIM Jennison Small Company Fund has three-year annualized returns of 28.8%. As of December 2022, PGOAX held 119 issues, and 2.8% of its assets were invested in TARGA RESOURCES.
MassMutual Small Cap Opportunities Fund seeks to achieve a long-term capital appreciation by investing in a diversified portfolio of equity securities, stocks and, convertible securities. MSCDX allocates its assets to publicly traded stocks of companies that have market capitalizations similar to those found in the Russell 2000 Index.
MassMutual Small Cap Opportunities Fund has three-year annualized returns of 22.9%. MSCDX has an expense ratio of 0.75% compared with the category average of 1.03%.
TIAA-CREF Quant Small-Cap Equity Fund invests its assets in small-cap equity securities, which fall within the capitalization range of companies listed in on the Russell 2000 Index.
TIAA-CREF Quant Small-Cap Equity Fund has three-year annualized returns of 22.6%. Pei Chen has been one of the fund managers of TCSEX since 2016.
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3 Small-Cap Blend Mutual Funds for Outstanding Returns
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