3 Large, Mid & Small Cap Blend Funds to Buy for Growth & Value - Mutual Fund Commentary

Blend funds are a type of equity mutual funds which holds in its portfolio a mix of value and growth stocks. Blend funds are also known as “hybrid funds”. Blend funds aim for value appreciation by capital gains. It owes its origin to a graphical representation of a fund's equity style box. In addition to diversification, blend funds are great picks for investors looking for a mix of growth and value investment.

: These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes. (Read:

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: Value mutual funds are those that invest in stocks that are trading at discounts to book value, have low price-to-earnings ratio and have high dividend yields. Value investing is an old strategy, evolving from investment ideas that Benjamin Graham and David Dodd first popularized in the late 1920s. (Read:

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Blend funds offer an alternative option for investors who are looking to diversify investments into growth and value assets. Also, blend funds are hugely diversified because they hold a large number of assets to cover both growth and value options. Being a hybrid fund, assets of blend funds also comprise stocks, bonds, and money market securities. Blend funds generally carry lower risk than stock funds, but are riskier than bond or money market funds.

Blend funds offer an amalgamation of what growth and value funds have to present to investors. A single minded focus toward capital appreciation is what best characterizes growth funds. Separately, value stocks are the ones that pay dividends. Thus, investors not only get to buy securities at a discount, but they get a steady income or yield.

Blend funds can also be categorized as large, mid and small-cap blend funds. Obviously, this is based on the size of the stocks a blend fund is investing in.

Market capitalization of a company is calculated by multiplying the shares outstanding with the market value of each share. The result will give us the market cap, depending on which the company can be categorized under large cap, mid cap or small cap. Generally, companies with more than $10 billion market cap are considered as a large-cap firm. Mid-cap companies have market capitalization within $2-$10 billion. A small-cap company is one that has market capitalization below $2 billion.

However market capitalization in case of funds does not reflect the size of the fund's assets. Instead, it is an indication on what type of securities the fund invests in.

We will suggest here the top blend funds from each market capitalization.

These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect the funds to outperform its peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but the likely future success of the fund.

These funds are also among the top gainers for this year so far.

These funds provide the least amount of risk. Most often, the large cap funds tend to duplicate the benchmarks – like S&P 500. These funds are ideal for investors with long-term investment timeline

(RYTNX) seeks to return investment results equal to 2 times the performance of the S&P 500. The fund invests in stocks having capitalization range within that of the S&P 500. It invests a lion's share of its assets in financial instruments having similar economic characteristics and potential to replicate the performance of equities in the underlying index.

The fund has returned 17.7% year to date. Over the last one and three years, the fund has returned 49.9% and 42.5%, respectively.

Top holdings of the fund include Apple Inc (AAPL), Exxon Mobil Corporation (XOM) and Microsoft Corp (MSFT).

These are ideal investment options for investors looking for high return potential that comes with lower risk than small-cap funds.

(WOOPX) seeks capital appreciation over the long run by investing in mid-cap companies. The fund invests most of its assets in stocks, rights, warrants and convertible securities of mid cap companies. These companies have market capitalization equivalent to those listed in the Russell Midcap Index.

The fund has returned 11.1% year to date. Over the last one and three years, the fund has returned 27.2% and 24%, respectively.

Top holdings of the fund include Western Digital Corp (WDC), Macy's Inc (M) and ManpowerGroup (MAN).

Small-cap funds are a good choice for investors seeking diversification across different sectors and companies. Investors with a high risk appetite should invest in these funds.

(ATIIX) invests primarily in equities of small-cap companies. A maximum of 10% of its assets may be invested in investment-grade debt securities and long-term U.S. government securities. The fund seeks capital growth over the long term while investing in undervalued securities. Up to 25% may be invested in foreign securities.

The fund has returned 8.6% year to date. Over the last one and three years, the fund has returned 16.1% and 17.4%, respectively.

Top holdings of the fund include Alliance Data Systems Corp (ADS), International Rectifier (IRF) and Booz Allen Hamilton Holding Corp (BAH).

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