3 Small-Cap Blend Mutual Funds for Outstanding Returns

Risk-loving investors, who give precedence to capital appreciation, along with dividend payouts, may consider small-cap blend mutual funds to derive healthy returns. These funds focus on realizing an appreciable amount of capital growth by investing in stocks that are projected to rise 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 a 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 in any global downturn.

Below, we share with you three top-ranked small-cap blend mutual funds, viz., TIAA-CREF Quant Small-Cap Equity Retail TCSEXPGIM Jennison Small Company Fund PGOAX and Davenport Small Cap Focus DSCPX. 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.

TIAA-CREF Quant Small-Cap Equity Retail fund invests most of its net assets in small-cap equity securities with market capitalization similar to the companies listed on the Russell 2000 Index at the time of purchase. TCSEX advisors generally invest in domestic companies in various sectors with acceptable growth rates and valuations.

TIAA-CREF Quant Small-Cap Equity Retail fund has three-year annualized returns of 7.6%. As of the end of July 2023, TCSEX had 397 issues and invested 1.3% of its net assets in Super Micro Computer, Inc.

PGIM Jennison Small Company Fund seeks to achieve long-term growth of capital. PGOAX invests its assets in common stocks of small, less well-known U.S. companies that the investment adviser believes are relatively undervalued and in equity-related securities, including nonconvertible preferred stocks and convertible securities.

PGIM Jennison Small Company Fund has three-year annualized returns of 5.6%. Jonathan M. Shapiro has been one of the fund managers of PGOAX since July 2018.

Davenport Small Cap Focus fund seeks maximum long-term total return, consistent with reasonable risk. DSCPX invests most of its assets in equity securities of small-capitalization companies.

Davenport Small Cap Focus fund has three-year annualized returns of 7.5%. DSCPX has an expense ratio of 0.88% compared with the category average of 1.03%.

To view the Zacks Rank and the past performance of all small-cap blend mutual funds, investors can click here to see the complete list of small-cap blend mutual funds.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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