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3 Strong Buy Small-Cap Value Mutual Funds

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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 that are trading at discounts to book value, have low price-to-earnings ratio and high dividend yields. Value investing is always a very popular strategy, and for good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlook, and decent dividends?

Meanwhile, small-cap funds are a good choice for investors with a high risk appetite as companies with small market capitalizations are expected to have higher growth potential than large- and mid-cap companies. Small-cap funds generally invest in companies with a market cap lower than $2 billion. Small-cap funds are also expected to provide diversification across different 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 is expected to outperform its peers in the future. Investors can click here to see the complete list of all small-cap value mutual funds, their Zacks Rank and past performance.

Bridgeway Omni Small-Cap Value N BOSVX seeks total return over the long run though growth of capital. BOSVX invests the lion’s share of its assets in equity securities of small-cap companies that are considered as undervalued. BOSVX may invest not more than 15% of its assets in securities of companies that are located in foreign lands. Bridgeway Omni Small-Cap Value N has returned 35.1% over the year-to-date frame.

BOSVX has an expense ratio of 0.60% compared with the category average of 1.33%.

JPMorgan Small Cap Value A (PSOAX - Free Report) invests the major portion of its assets in equity securities of small cap companies. PSOAX takes a value-oriented approach to invest in companies with market capitalization identical to those listed in the Russell 2000 Value Index. PSOAX primarily emphasizes on acquiring common stocks and REITs. JPMorgan Small Cap Value A has returned 31.1% over the year-to-date frame.

Dennis S. Ruhl has been one of the portfolio managers of PSOAX since 2005.

MassMutual Select Small Company Value Service MMVYX seeks capital appreciation over the long run. MMVYX invests the lion’s share of its assets in securities of companies whose market-cap falls within the range of the S&P SmallCap 600 or Russell 2000 indices. MassMutual Select Small Company Value Service has returned 26.3% over the year-to-date frame.

As of September 2016, MMVYX held 444 issues, with 1.08% of its assets invested in Radian Group Inc.

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.

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