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Buy These 3 Small-Cap Growth Mutual Funds for Superb Returns

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Small-cap funds generally invest in companies having a market cap of less than $2 billion. The companies, smaller in size, offer growth potential, and their market capitalization may increase subsequently. Less international exposure makes small-cap funds less vulnerable to a stronger U.S. dollar.

Though small-cap stocks are believed to provide greater returns, they are also expected to be more volatile than large and mid-cap companies. Also, growth funds may experience more fluctuations than the other fund classes.

Risky investors who prefer capital appreciation over dividend payout may consider small-cap growth mutual funds. Growth funds focus on realizing an appreciable amount of capital growth by investing in stocks projected to rise in value over the long term. Meanwhile, small-cap funds are good choices for investors seeking diversification across different sectors and companies.

Below, we share with you three top-ranked small-cap growth mutual funds, namely AMG GW&K Small/Mid Cap Growth Fund (ACWDX - Free Report) , DFA - U.S. Small Cap Growth Portfolio (DSCGX - Free Report) and Value Line Small Cap Opportunities Fund (VLEOX - 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 Growth Fund 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. ACWDX defines small and mid-cap companies to be those within the range of the Russell 2500 Growth Index.

AMG GW&K Small/Mid Cap Growth Fund has a three-year annualized return of 14.5%. As of January 2023, ACWDX held 75 issues, with 2.5% of its assets invested in Atkore.

DFA - U.S. Small Cap Growth Portfolio invests most of its assets in securities of small-cap U.S. companies having high profitability and relative prices compared to other U.S. small-cap companies. DSCGX advisors generally invest in a portfolio of a broad and diverse group of readily marketable securities.

DFA - U.S. Small Cap Growth Portfolio has three-year annualized returns of 17.9%. DSCGX has an expense ratio of 0.33% compared with the category average of 1.21%.

Value Line Small Cap Opportunities Fund invests the majority of its net assets in the securities of small- and mid-cap U.S. companies. VLEOX advisors define stocks of U.S. players as companies that do business in the United States, have a foundational base in the country or are traded on a U.S. exchange or over-the-counter market.

Value Line Small Cap Opportunities Fund has a three-year annualized return of 13.3%. Stephen E. Grant has been one of the fund managers of VLEOX since 1998.

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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