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3 Small-Cap Blend Mutual Funds for Sublime Returns

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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 through 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.

Below, we share with you three top-ranked small-cap blend mutual funds, viz., Davenport Small Cap Focus Fund (DSCPX - Free Report) , Nuveen Quant Small Cap Equity (TCSEX - Free Report) and T. Rowe Price Integrated US Small-Mid Cap Core Equity (TQSMX - 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.

Davenport Small Cap Focus Fund seeks maximum long-term total return, consistent with reasonable risk. DSCPX invests most of its assets in equity securities of small-capitalization companies.

Davenport Small Cap Focus Fund has three-year annualized returns of 6.8%. As of March 2024, DSCPX held 33 issues, with 5.1% of its assets invested in Monarch Casino & Resort, Inc.

Nuveen Quant Small Cap Equity fund invests most of its net assets in small-cap equity securities with market capitalization similar to the companies listed on the Russell 2000 Index at the time of purchase. TCSEX advisors generally invest in domestic companies in various sectors with acceptable growth rates and valuations.

Nuveen Quant Small Cap Equity has three-year annualized returns of 6.3%. Pei Chen has been one of the fund managers of TCSEX since 2016.

T. Rowe Price Integrated US Small-Mid Cap Core Equity fund invests most of its net assets in equity securities of small and mid-cap U.S. companies. For its investment purposes, TQSMX defines small and mid-cap securities as ones with market cap within the market capitalization range of the Russell 2500 Index during the time of purchase.

T. Rowe Price Integrated US Small-Mid Cap Core Equity has three-year annualized returns of 9.3%. TQSMX has an expense ratio of 0.87%.

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

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