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 by 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 market capitalization below $2 billion are generally considered small-cap mutual funds. Though 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 will share with you three top-ranked 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. Investors can click here to see the complete list of funds.
Bridgeway Ultra Small Company Market Fund (BRSIX - Free Report) invests the majority of its assets in stocks of ultra-small companies, which is judged by their size at the time of investment. The fund aims to offer long-term appreciation of capital. BRSIX approximates the total return of the Cap-Based Portfolio 10 Index over long periods of time. Bridgeway Ultra Small Company Market Fund has three-year annualized returns of 4.8%.
As of June 2017, BRSIX held 624 issues with 0.7% of its assets invested in Utah Medical Products Inc.
JPMorgan Small Cap Core Fund Class R5 (VSSCX - Free Report) invests a bulk of its assets, including borrowings, in equity securities of small-cap companies with market-cap within the range of the Russell 2000 Index. VSSCX seeks capital appreciation for the long run. JPMorgan Small Cap Core R5 has three-year annualized returns of 7.1%.
VSSCX has an expense ratio of 0.80% compared with the category average of 1.21%.
T. Rowe Price Small-Cap Value Fund (PRSVX - Free Report) seeks capital appreciation for the long run by investing the majority of its assets in companies with market capitalization within the range of the Russell 2000 Index. PRSVX may also invest in securities of companies located in foreign lands. Further, the fund may choose to sell its securities for reasons such as restricting losses and reallocating assets in other securities with higher prospects. T. Rowe Price Small-Cap Value has three-year annualized returns of 8.3%.
J. David Wagner is the fund manager of PRSVX since 2014.
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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