Small-cap blend funds are a type of equity mutual funds that hold in their portfolio a mix of value and growth stocks, the market capitalization of which are generally lower than $2 billion. Blend funds are also known as “hybrid funds.” Blend funds aim for value appreciation by capital gains. It owes its origin to a graphical representation of a fund’s equity style box.
In addition to diversification, blend funds are great picks for investors looking for a mix of growth and value investment. Meanwhile, small-cap funds are a good choice for investors seeking diversification across different sectors and companies. Investors with a high risk appetite should invest in these funds.
Below we will share with you three buy-rated small-cap blend mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all small-cap blend mutual funds, investors can click here to see the complete list of funds.
Federated MDT Small Cap Core A (QASCX - MF report) invests the majority of its assets in stocks of small-cap companies. QASCX invests mostly in companies listed in the Russell 2000 Index. The fund seeks long-term growth of capital and its investments aren’t restricted to equity securities of domestic issuers. Federated MDT Small Cap Core A has a three-year annualized return of 10.4%.
As of June 2016, QASCX held 178 issues, with 1.66% of its assets invested in Dean Foods Co.
Sentinel Small Company C (SSCOX - MF report) seeks long-term capital appreciation. SSCOX invests the majority of its assets in companies with market capitalization below $4 billion. The fund invests in companies that are believed to have impressive fundamentals including attractive value and sustainable growth prospects. Also, SSCOX may invest in non-US securities that are traded in the U.S. or Canada, or are denominated in U.S. or Canadian dollars. Sentinel Small Company C fund a three-year annualized return of 7%.
Jason Ronovech is the fund manager of SSCOX since 2013.
TIAA-CREF Small-Cap Equity Retire (TRSEX - MF report) invests heavily in domestic small cap companies having market capitalization identical to those included in the Russell 2000 Index. TRSEX primarily invests in small sized companies across different sectors. TIAA-CREF Small-Cap Equity Retire has a three-year annualized return of 7.8%.
TRSEX has an expense ratio of 0.67% compared to a category average of 1.37%.
To view the Zacks Rank and past performance of all small-cap blend mutual funds, investors can click here to see the complete list of funds.
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