Investors with a high risk appetite as well as 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 are expected to 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 lower than $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 top-rated 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 .
Schwab Small-Cap Equity SWSCX seeks capital appreciation over the long term. SWSCX invests a bulk of its assets in equity securities of small-cap companies that fall within the range of the Russell 2000 Index. The fund maintains a portfolio which aims to provide better returns than the Russell 2000 Index in the long run. Schwab Small-Cap Equity returned 22.4% in the last one year.
Jonas Svallin is one of the fund managers of SWSCX since 2012.
JPMorgan Small Cap Core R5 VSSCX invests a major portion of its assets including borrowings in the securities of small-cap companies from the Russell 2000 Index. VSSCX seeks capital appreciation for the long run. JPMorgan Small Cap Core R5 returned 27.4% in the last one year.
VSSCX has an expense ratio of 0.80% compared with the category average of 1.22%.
Principal SmallCap S&P 600 Index R4PSSSX seeks capital growth for the long run. PSSSX invests the lion's share of its assets in equity securities of companies that fall within the range of the SmallCap 600 Index. Companies with market cap between $51.6 million and $4.5 billion are generally included in the SmallCap 600 Index. Principal SmallCap S&P 600 Index R4 returned 21.5% in the last one year.
As of February 2017, PSSSX held 606 issues, with 2.46% of its assets invested in Russell 2000 Mini Mar17.
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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