Small-cap funds are good choices for investors seeking diversification across different sectors and companies. Investors with a high-risk appetite should pick these funds. Small-cap funds generally invest in companies with a market cap of less than $2 billion. The companies, smaller in size, offer growth potential and their market capitalization may increase subsequently.
Meanwhile, value stocks tend to trade at a price lower than their fundamentals (i.e. earnings, book value, debt-equity). It is common for some investors to invest in value funds for income or yield. However, not all value funds comprise solely companies that primarily use their earnings to pay dividends. Investors interested in choosing value funds for yield should make sure to check the mutual fund yield. The mutual fund yield is dividend payments divided by the value of the mutual fund’s shares.
Below, we share with you three top-ranked small-cap value mutual funds, viz., Heartland Value Investor HRTVX, Sterling Capital Behav Sm Cp Val Eq SPSAX and DFA US Small Cap Value DFSVX. Each has 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 Small Cap Value mutual funds.
Heartland Value Investor fund seeks long-term capital appreciation. HRTVX invests primarily in stocks of small companies with market capitalizations of less than $1.5 billion selected on a value basis.
Heartland Value Investor has a three-year annualized return of 7.7%. As of the end of December 2024, HRTVX held 99 issues, with 2.9% of its assets invested in Chart Industries, Inc.
Sterling Capital Behav Sm Cp Val Eq fund seeks long-term capital growth. SPSAX invests its net assets in approximately 40 large, established companies with large market capitalizations that the portfolio managers believe offer potential for superior long-term growth.
Sterling Capital Behav Sm Cp Val Eq has a three-year annualized return of 5.3%. Robert O. Weller has been the fund manager of SPSAX since 2013.
DFA US Small Cap Value fund seeks long-term capital appreciation. DFSVX invests in value stocks, and securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value.
DFA US Small Cap Value has three-year annualized returns of 7.4%. DFSVX has an expense ratio of 0.31%.
To view the Zacks Rank and the past performance of all small-cap value mutual funds, investors can click here to see the complete list of small-cap value mutual funds.
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 >>
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>View All Zacks #1 Ranked Mutual Funds
Get Your Free (DFSVX): Fund Analysis Report
Get Your Free (HRTVX): Fund Analysis Report
Get Your Free (SPSAX): Fund Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
