When investors have the willingness to take short term positions and the ability to bear a certain degree of risk, small-cap funds could be the correct choice. These funds generate significant demand driven sales during a market upswing, which lead to an increase in their prices. Smaller firms also look to continuously reinvest their profits back into their business. This reassures shareholders of superior performance and higher profit potential from such companies. Small Cap funds therefore make excellent additions to a well-diversified portfolio.
Below we will share with you 5 top rated small-cap mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all small-cap funds, investors can click here to see the complete list of funds.
Diamond Hill Small Cap A (DHSCX) seeks capital growth over the long-term. The fund invests the majority of its assets in domestic equity securities issued by small cap firms. These securities are believed to be attractively priced relative to their underlying value at the time of the purchase. This small-cap mutual fund returned 30.61% over the last one year period.
The small-cap mutual fund has an expense ratio of 1.31% compared to a category average of 1.41%.
Bridgeway Ultra-Small Company (BRUSX) invests a large share of its assets in a wide range of “ultra-small companies”. A maximum of 15% of its assets are invested in foreign instruments. This small-cap mutual fund returned 42.85% over the last one year period.
John Montgomery is the fund manager and he has managed this small-cap mutual fund since 1994.
PNC Small Cap A (PPCAX) seeks capital growth. The fund invests the majority of its assets in small cap firms. These firms must be domestic companies with a market capitalization between $100 million and $3 billion. This small-cap mutual fund returned 31.77% over the last one year period.
As of June 2013, this small-cap mutual fund held 50 issues, with 4.22% of its total assets invested in Portfolio Recovery Associates, Inc.
Touchstone Small Cap Core A (TSFAX) invests in 30 to 40 securities and seeks capital growth. The majority of the fund’s investments are made in domestic small cap companies. The fund focusses on acquiring small cap stocks. This small-cap mutual fund returned 27.68% over the last one year period.
The small-cap mutual fund has a minimum initial investment $2,500 and an expense ratio of 1.34% compared to a category average of 1.31%.
Glenmede Small Cap Equity (GTCSX) seeks capital growth. The fund invests a large share of its assets in equity of undervalued small cap domestic companies. Small cap companies include those companies whose market cap fall within the range of the market cap of companies listed on the Russell 2000 Index. This small-cap mutual fund returned 30.73% over the last one year period.
Robert J. Mancuso is the fund manager and he has managed this small-cap mutual fund since 1996.
To view the Zacks Rank and past performance of all small-cap mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
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