Small-cap funds are the preferred option for investors with a
reasonable appetite for risk and the willingness to take short term
positions. Further, it has been observed over time that smaller
firms reinvest a significant share of their profits back into their
business on a regular basis. Small cap funds also experience high
demand when markets are surging which leads to significant
increases in their prices. Investors looking for greater
diversification could easily achieve their objective by adding
small-cap funds to their portfolios.
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
.
T. Rowe Price Small-Cap Stock
(
OTCFX
) seeks long term capital appreciation. The fund invests heavily in
small-cap companies. The fund invests across various economic
sectors and without regard to company size. Not more than 1.5% of
its assets may be invested in a single company. This small-cap
mutual fund has a three year annualized return of 22.71%.
The fund manager is Gregory A. McCrickard and he has managed
this small-cap mutual fund since 1992.
Waddell & Reed Small Cap A
(
UNSAX
) invests the majority of its assets in domestic and foreign
small-cap companies. The fund focuses on acquiring common stocks of
companies which are new entrants, particularly those entering
growing sectors. This small-cap mutual fund has a three year
annualized return of 20.76%.
As of June 2012, this small-cap mutual fund held 70 issues, with
3.52% of its total assets invested in Ultimate Software Group,
Inc.
Longleaf Partners Small-Cap
(
LLSCX
) seeks long-term capital appreciation by investing in small-cap
companies. Equity securities, including related convertible
securities constitute the fund's major investments. A maximum of
30% of its assets may be used to purchase foreign securities,
including those issued from emerging markets. This small-cap mutual
fund has a three year annualized return of 23.33%.
The small-cap mutual fund has an expense ratio of 0.92% compared
to a category average of 1.29%.
Legg Mason ClearBridge Small Cap Growth A
(
SASMX
) invests a large share of its net assets in small cap companies
and related instruments. The fund concentrates on investing in
small domestic companies which focus on delivering growth. This
small-cap mutual fund has a three year annualized return of
20.31%.
The fund manager is Aram E. Green and he has managed this
small-cap mutual fund since 2007.
Buffalo Small Cap
(
BUFSX
) seeks capital growth over the long term. The fund invests the
majority of its assets in common, preferred stocks and related
convertible securities of domestic small-cap companies. A maximum
of 20% of its assets may be invested in ADRS. This small-cap mutual
fund has a three year annualized return of 13.43%.
The small-cap mutual fund has a minimum initial investment of
$2,500 and an expense ratio of 1.00% compared to a category average
of 1.45%.
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
.
View All Zacks #1 Ranked Mutual Funds
(BUFSX): ETF Research Reports
(LLSCX): ETF Research Reports
(OTCFX): ETF Research Reports
(SASMX): ETF Research Reports
(UNSAX): ETF Research Reports
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