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4 Small-Cap Funds That Gained the Most in the Past Year
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Small-cap mutual funds have generated outstanding returns over the past year. Despite higher prices and brokerage fees, these funds outperformed their peers in the period. Per Morningstar, these funds generated an average one-year return of almost 4%.
To put that into perspective, funds with a minimum of $500 million in assets under management generated average returns of 15.4% in the past year. Therefore, it will not be wrong to say that with much lesser assets, small-cap funds have generated pretty decent one-year returns. Per Bankrate’s senior financial analyst, Greg McBride, Fed’s decision to hold rates steady for long periods contributed to the performance.
Under such circumstances, let’s consider some of the best-performing small-cap mutual funds with generous one-year returns.
UBS Expects Small-Cap Funds to Lead the Way in 2019
UBS, the largest global wealth manager, advised that investors should stay invested in the stock market in 2019 regardless of their risk-undertaking capabilities.
Mark Haefele, global chief investment officer at UBS Global Wealth Management, said on Jan 14, "The period of 18 months to 6 months before a recession is often when you get most of your returns because that's when economies do strongly.”
Since small-cap stocks offer greater scope of securing higher returns compared to large-cap stocks, investing in small-cap mutual funds could be profitable.
Why Invest in Small-Cap Growth Funds?
Small-cap growth funds are natural choices for investors with a high-risk appetite when capital appreciation over the long term takes precedence over dividend payouts. 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 against any global downturn.
4 Best Fund Choices
We have, thus, selected four small-cap growth mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from such factors. Moreover, these funds have outstanding one and three-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
BlackRock Small Cap Growth Fund (CSGEX - Free Report) invests the major portion of its assets in equity securities of small-cap domestic companies. According to CSGEX advisors, companies with market cap similar to those included on the Russell 2000 index are considered small cap.
This Sector - Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
CSGEXhas a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.75%, which is below the category average of 1.21%. The fund has one and three-year returns of 1.7% and 15.6%, respectively.
MassMutual Select Small Cap Growth Equity Fund (MSGSX - Free Report) invests a large chunk of its assets in equity securities of companies, whose market cap is similar to those included on the S&P SmallCap 600 index or the Russell 2000 index. The fund may also invest around one-fifth of its assets in foreign companies, including those engaged in emerging markets.
This Sector - Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MSGSXhas a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.95%, which is below the category average of 1.21%. The fund has one and three-year returns of 2.9% and 17.2%, respectively.
JPMorgan Small Cap Growth Fund A (PGSGX - Free Report) invests a huge part of its assets in securities issued by small-cap companies. These are companies with market capitalization equivalent to those listed on the Russell 2000 Growth index and below $4 billion at the time of purchase. The fund seeks capital appreciation for the long run.
This Sector - Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PGSGX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 1.21%, which is below the category average of 1.24%. The fund has one and three-year returns of 2.5% and 23.8%, respectively.
Loomis Sayles Small Cap Growth Fund Retail Class (LCGRX - Free Report) seeks long-term capital appreciation by investing 80% of its net assets in securities of small-cap companies.
This Zacks sector – Small Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
LCGRX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.19%, which is below the category average of 1.21%. The fund has one and three-year returns of 4.6% and 17.3%, respectively.
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4 Small-Cap Funds That Gained the Most in the Past Year
Small-cap mutual funds have generated outstanding returns over the past year. Despite higher prices and brokerage fees, these funds outperformed their peers in the period. Per Morningstar, these funds generated an average one-year return of almost 4%.
To put that into perspective, funds with a minimum of $500 million in assets under management generated average returns of 15.4% in the past year. Therefore, it will not be wrong to say that with much lesser assets, small-cap funds have generated pretty decent one-year returns. Per Bankrate’s senior financial analyst, Greg McBride, Fed’s decision to hold rates steady for long periods contributed to the performance.
Under such circumstances, let’s consider some of the best-performing small-cap mutual funds with generous one-year returns.
UBS Expects Small-Cap Funds to Lead the Way in 2019
UBS, the largest global wealth manager, advised that investors should stay invested in the stock market in 2019 regardless of their risk-undertaking capabilities.
Mark Haefele, global chief investment officer at UBS Global Wealth Management, said on Jan 14, "The period of 18 months to 6 months before a recession is often when you get most of your returns because that's when economies do strongly.”
Since small-cap stocks offer greater scope of securing higher returns compared to large-cap stocks, investing in small-cap mutual funds could be profitable.
Why Invest in Small-Cap Growth Funds?
Small-cap growth funds are natural choices for investors with a high-risk appetite when capital appreciation over the long term takes precedence over dividend payouts. 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 against any global downturn.
4 Best Fund Choices
We have, thus, selected four small-cap growth mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are poised to gain from such factors. Moreover, these funds have outstanding one and three-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
BlackRock Small Cap Growth Fund (CSGEX - Free Report) invests the major portion of its assets in equity securities of small-cap domestic companies. According to CSGEX advisors, companies with market cap similar to those included on the Russell 2000 index are considered small cap.
This Sector - Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
CSGEXhas a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.75%, which is below the category average of 1.21%. The fund has one and three-year returns of 1.7% and 15.6%, respectively.
MassMutual Select Small Cap Growth Equity Fund (MSGSX - Free Report) invests a large chunk of its assets in equity securities of companies, whose market cap is similar to those included on the S&P SmallCap 600 index or the Russell 2000 index. The fund may also invest around one-fifth of its assets in foreign companies, including those engaged in emerging markets.
This Sector - Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MSGSXhas a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.95%, which is below the category average of 1.21%. The fund has one and three-year returns of 2.9% and 17.2%, respectively.
JPMorgan Small Cap Growth Fund A (PGSGX - Free Report) invests a huge part of its assets in securities issued by small-cap companies. These are companies with market capitalization equivalent to those listed on the Russell 2000 Growth index and below $4 billion at the time of purchase. The fund seeks capital appreciation for the long run.
This Sector - Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PGSGX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 1.21%, which is below the category average of 1.24%. The fund has one and three-year returns of 2.5% and 23.8%, respectively.
Loomis Sayles Small Cap Growth Fund Retail Class (LCGRX - Free Report) seeks long-term capital appreciation by investing 80% of its net assets in securities of small-cap companies.
This Zacks sector – Small Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
LCGRX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.19%, which is below the category average of 1.21%. The fund has one and three-year returns of 4.6% and 17.3%, respectively.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>