Small-cap value mutual funds provide excellent choices for investors who are looking for bargain, i.e., stocks at a discount, with an impressive growth potential. Value mutual funds are those that invest in stocks trading at discounts to book value, have a low price-to-earnings ratio and high dividend yields. Value investing has always been popular, and for good reasons. After all, who doesn’t want to find stocks that have low PEs, solid outlooks and decent dividends?
Meanwhile, a small-cap fund is a good choice for investors with a high risk appetite as companies with small market capitalization are expected to have higher growth potential than large- and mid-cap companies. Small-cap funds generally invest in companies having market cap lower than $2 billion. Also, small-cap funds are expected to provide diversification across sectors and companies.
Below we share with you three top-rated, small-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all small-cap value mutual funds, investors can click here to see the complete list of small-cap value funds .
Eagle Smaller Company A seeks capital growth. EGEAX invests a major portion of its assets in the equity securities of small-cap companies. Such companies have a market capitalization equal to or less than the largest company listed in the Russell 2000 Index during the most recent 12-month period. The Eagle Smaller Company A fund has a three-year annualized return of 4.7%.
As of December 2015, EGEAX held 99 issues with 1.93% of its assets invested in Qlik Technologies Inc
Perkins Small Cap Value A (JDSAX - Free Report) invests a large chunk of its assets in common stocks of undervalued small-cap companies. JDSAX invests in securities of companies with market capitalization similar to those listed in the Russell 2000 Value Index. JDSAX may invest a maximum of 20% of its assets in cash or equivalents. The Perkins Small Cap Value A fund has a three-year annualized return of 7.6%.
JDSAX has an expense ratio of 1.03% as compared to the category average of 1.31%.
CornerCap Small Cap Value (CSCVX - Free Report) seeks capital growth over the long run. CSCVX invests a large share of its assets in small cap companies located in the U.S. CSCVX defines firms with market capitalization below $3 billion as small cap. The CornerCap Small Cap Value fund has a three-year annualized return of 11.3%.
As of December 2015, CSCVX held 215 issues with 0.68% of its assets invested in INC Research Holdings Inc A.
To view the Zacks Rank and past performance of all small-cap value 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. Pick the best mutual funds with the Zacks Rank.