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4 Top-Rated Small-Cap Blend Mutual Funds to Invest In

Zacks Equity Research
Updated

Investors looking to invest in a portfolio that provides significant exposure to both value and growth stocks, and wanting to diversify their investments across a wide range of sectors and companies, may consider small-cap blend mutual funds. Blend funds or “hybrid funds” owe their origin to a graphical representation of a fund’s equity style box and aim for value appreciation by capital gains.

Meanwhile, small-cap companies are believed to be less affected by a global downturn, thanks to limited international exposure. Though funds investing in small-cap stocks are believed to be more volatile than funds with a more large or mid-cap focus, these are expected to have higher growth prospects than their large and medium counterparts. Companies with market capitalization lower than $2 billion are generally considered small-cap firms.

Below we will share with you 4 buy-rated small-cap blend mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (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 blend mutual funds, investors can click here to see the complete list of funds .

Fidelity Stock Selector Small Cap (FDSCX) seeks capital growth by investing its assets across a wide range of sectors. FDSCX invests a major portion of its assets in common stocks of companies having market capitalizations within the universe of the Russell 2000 Index or the S&P SmallCap 600 Index. The Fidelity Stock Selector Small Cap fund has a three-year annualized return of 7.2%.

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As of October 2015, FDSCX held 207 issues, with 1.75% of its total assets invested in Bank of the Ozarks Inc.

SSgA Dynamic Small Cap N (SVSCX) invests a large chunk of its assets in equity securities of companies listed in the Russell 2000 Index. SVSCX may also invest a maximum of 20% of its assets in securities of companies that are not included in the index. The SSgA Dynamic Small Cap N fund has a three-year annualized return of 8.9%.

SVSCX has an expense ratio of 1.10% as compared to the category average of 1.24%.

JPMorgan US Small Company C (JTUCX) seeks total return. JTUCX invests a large portion of its assets in equity securities of small-cap U.S. companies. These small-cap companies have market capitalization similar to those companies listed in the Russell 2000 Index during the time of purchase. The JPMorgan US Small Company C fund has a three-year annualized return of 7.6%.

As of January 2016, JTUCX held 371 issues, with 1.48% of its total assets invested in Take-Two Interactive Software Inc.

Vanguard Strategic Small-Cap Equity Investor (VSTCX) invests the majority of its assets in small-cap domestic equity securities. VSTCX invests in securities that have strong growth prospects and reasonable valuations compared to their industry peers. VSTCX achieves this balance by applying a quantitative process to evaluate all of the securities in the MSCI US Small Cap 1750 Index. The Vanguard Strategic Small-Cap Equity Investor fund has a three-year annualized return of almost 10%.

VSTCX has an expense ratio of 0.34% as compared to the category average of 1.24%.

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 .

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. Pick the best mutual funds with the Zacks Rank.


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