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3 Top-Ranked Small-Cap Growth Funds for Steady Returns

Risk-loving investors, who give precedence to capital appreciation over dividend payouts, may consider small-cap growth mutual funds to derive healthy returns. These funds focus on realizing an appreciable amount of capital growth by investing in stocks that are 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. Small-cap funds generally invest in companies having market cap lower than $2 billion. The companies, smaller in size, offer growth potential and their market capitalization may increase subsequently. Also, due to their less international exposure, small-cap funds offer higher protection than their large and mid-cap counterparts in any global downturn.

Below we share with you three top-ranked, small-cap growth 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 small-cap growth funds.

Hartford Small Company HLS Fund IA (HIASX - Free Report) seeks appreciation of capital. HIASX primarily invests its assets in common stocks issued by small capitalization companies. The fund may also invest almost one-fifth of its assets in securities of non-U.S. issuers. Small capitalization companies are those whose market capitalization falls within the collective range of the Russell 2000 and S&P SmallCap 600 indices. Hartford Small Company HLS Fund IA has returned 21.9% in the last one-year period.

HIASX has an expense ratio of 0.76% compared with the category average of 1.28%. 

T. Rowe Price QM US Small-Cap Growth Equity (PRDSX - Free Report) seeks capital appreciation over the long run. PRDSX invests the lion’s share of its assets in securities of growth-oriented companies with small size market capitalization. Though PRDSX primarily focuses on acquiring securities of domestic companies, it may also invest not more than 10% of its assets in securities of companies located in foreign lands. T. Rowe Price QM US Small-Cap Growth Equity has returned 21.7% in the last one-year period.

As of March 2017, PRDSX held 299 issues, with 0.99% of its assets invested in Vail Resorts Inc.

TCM Small Cap Growth (TCMSX - Free Report) invests a large share of its assets in companies having market capitalization similar to those listed on the Russell 2000 Index. TCMSX seeks growth of capital over the long term. TCM Small Cap Growth has returned 28.4% in the last one-year period.

Richard J. Johnson is the fund manager of TCMSX since 2004.

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

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