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 growth mutual funds, namely Nuveen Quant Small Cap Equity Fund TCSEX, Federated Hermes Mdt Small Cap Core Fund QASCX and Fidelity Commonwealth Trust Fidelity Small Cap Stock Fund FSLCX. 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 small-cap blend funds.
Nuveen Quant Small Cap Equity Fund seeks favorable long-term total returns by investing most of its net assets in small-cap equity securities. TCSEX advisors generally invest in companies that they believe have bright prospects for significant long-term capital appreciation potential.
Nuveen Quant Small Cap Equity Fund has three-year annualized returns of 15.3%.As of the end of October 2025, TCSEX had 380 issues and invested 1.9% of its net assets in Bloom Energy.
Federated Hermes Mdt Small Cap Core Fund invests most of its assets, along with borrowings, if any, in small-cap domestic equity securities listed on the Russell 2000 Index. QASCX advisors may also invest in non-limited issues.
Federated Hermes Mdt Small Cap Core Fund has three-year annualized returns of 13.8%. QASCX has an expense ratio of 1.13%.
Fidelity Commonwealth Trust Fidelity Small Cap Stock Fund invests most of its assets, along with borrowings, if any, in common stocks of small-cap foreign and domestic companies with market capitalization similar to the companies listed on the Russell 2000 Index or the S&P SmallCap 600 Index. FSLCX advisors use fundamental analysis factors, such as financial condition, industry position, as well as market and economic conditions, to select either growth or value stocks or stocks with both characteristics.
Fidelity Commonwealth Trust Fidelity Small Cap Stock Fund has three-year annualized returns of 12.3%. Marc Grow has been one of the fund managers of FSLCX since February 2022.
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.
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 >>
Zacks Names #1 Semiconductor Stock
This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.
See This Stock Now for Free >>View All Zacks #1 Ranked Mutual Funds
Get Your Free (FSLCX): Fund Analysis Report
Get Your Free (TCSEX): Fund Analysis Report
Get Your Free (QASCX): 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.
