Risk-loving investors, who give precedence to capital appreciation over dividend payouts, may consider small-cap growth mutual funds for healthy returns. These funds focus on realizing an appreciable amount of capital growth by investing in stocks that are set to gain 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 with market cap less than $2 billion. The companies, smaller in size, offer growth potential and their market capitalization may increase subsequently. Also, due to their limited international exposure, small-cap funds offer higher protection than their large and mid-cap counterparts during economic downturns.
Below we share with you three top-ranked, small-cap growth mutual funds. Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform peers in the future. Investors can click here to see the complete list of small-cap growth funds.
Goldman Sachs Small Cap Growth Insights Investor (GSTOX - Free Report) maintains a diversified portfolio by investing primarily in equity securities of companies whose market-cap is similar to those on the Russell 2000 index. The fund may also invest in fixed income securities believed to be cash equivalents. Goldman Sachs Small Cap Growth Insights Investor has one-year annualized returns of 32.9%.
As of April 2018, GSTOX held 341 issues, with 1.34% of its assets invested in E-Mini Russ 2000 Jun18 Xcme 20180615.
Hartford Small Cap Growth HLS IA (HISCX - Free Report) invests a large chunk of its assets in common stocks of small-cap companies that are expected to have impressive growth potential by the fund's sub-adviser, Wellington Management. HISCX focuses on those small-cap companies that are included on the S&P SmallCap 600 and the Russell 2000 indices. Hartford Small Cap Growth HLS IA has one-year annualized returns of 26.9%.
HISCX has an expense ratio of 0.66% as compared to the category average of 1.34%.
Loomis Sayles Small Cap Growth Retail (LCGRX - Free Report) invests a huge portion of its assets in equity securities of small-cap companies. The fund focuses on those small-cap companies, whose market cap is similar to those within the range of the Russell 2000 index or has market cap of $3 billion or lower. Loomis Sayles Small Cap Growth Retail has one-year annualized returns of 37.6%.
Mark F. Burns is one of the fund managers of LCGRX since 2005.
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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