Risk-loving investors, who give precedence to capital appreciation over dividend payouts, may consider small-cap growth 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 in value 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 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. 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 growth funds.
Consulting Group Small-Mid Cap Equity (TSGUX – Free Report) seeks growth of capital. TSGUX invests the major portion of its assets in equity securities of small-mid cap companies. The fund may also invest around one-tenth of its assets in securities of foreign companies, which are not traded in the U.S. OTC or on a U.S. exchange.Consulting Group Small-Mid Cap Equity has three-year annualized returns of 6.9%.
As of June 2017, TSGUX held 2,566 issues, with 2.36% of its assets invested in iShares Russell 2000 Value ETF.
TCM Small Cap Growth (TCMSX – Free Report) invests a large part of its assets in those small-cap companies whose market-cap falls within the range of the Russell 2000 Index. TCMSX seeks growth of capital over the long term. TCM Small Cap Growth has three-year annualized returns of 12.8%.
TCMSX has an expense ratio of 0.95% compared with the category average of 1.34%.
JPMorgan Small Cap Growth (PGSGX – Free Report) seeks growth of capital for the long run. PGSGX invests heavily in securities issued by small-cap companies. Notably, small-cap companies are those whose market cap falls within the range of the Russell 2000 Growth Index. The fund also invests in securities of emerging growth companies. JPMorgan Small Cap has three-year annualized returns of 13.5%.
Greg Tuorto is one of the fund managers of PGSGX since 2016.
To view the Zacks Rank and past performance of all small-cap growth mutual funds, investors can click here to see the complete list of small-cap growth funds.
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