Top Small-Cap Equity Funds - Mutual Fund Commentary
Today we are featuring top-performing “Small-Cap" equity mutual funds, which primarily invest in equity securities of companies that have market capitalizations of less than $2 billion because they reap maximum benefits from a bullish market and rising prices. Most small-cap companies also reinvest their profits, thus reassuring shareholders of superior performance and profit potential.
Investors can find such small-cap funds by checking out the entire list of the Zacks #1 Rank Small-Cap Equity Funds.
5 Excellent Small-Cap Choices
John Hancock Small Cap Intrinsic Value A (JHIAX) was incepted in January 2006. This fund seeks long-term capital growth.
At least 80% of this small-cap fund’s assets in equity securities of small-cap companies within the capitalization range of the Russell 2000 index. The fund may invest up to 20% of assets in bonds of any maturity rated as low as CC/Ca and similar unrated securities. In exceptional circumstances, the fund may temporarily invest in investment-grade short-term securities. It may also invest up to 35% of its assets in foreign companies.
The small-cap fund has an expense ratio of 1.56% against a category average of 1.41%. As of July 2009 it has a portfolio turnover of 94% compared to a category average of 92%. The fund’s top holdings include DG FastChannel Inc, Washington Post Company and PICO Holdings, Inc. For the 1-year period ended October 31, 2009 the fund outperformed the Russell 2000 Index which is a broad measure of small-cap stock performance.
Timothy M. Malloy has been lead manager of the fund since February 2005. Before his current assignment, Malloy was an investment analyst at Thomas Weisel Partners.
Ariel Fund (ARGFX) seeks capital appreciation. It was incepted in November 1986.
The small-cap fund invests heavily in small companies with a market capitalization under $2 billion. It seeks to invest in undervalued companies that are not given due attention by institutional investors, analysts and the media. The fund could also invest up to 10% of its assets in foreign companies.
The small-cap fund has an expense ratio of 1.07% against a category average of 1.38%. As of September 2009, it has a portfolio turnover of 45% against a category average of 90%. The fund’s top holdings include Gannett Co Inc, Hewitt Associates, Inc. and IMS Health, Inc. For the quarter ended December 31, 2009, the fund outperformed the Russell 2500 Value Index as well as the Russell 2500 Index.
John W. Rogers, Jr. has been lead manager of this small-cap fund since November 1986. Rogers has vast experience in portfolio management and investments analysis and is chairman and chief investment officer of Ariel Capital.
Fidelity Small Cap Stock (FSLCX) seeks long-term capital growth. It was incepted in March 1998.
The majority of the small-cap fund’s assets are used to purchase common stocks of companies with market capitalization corresponding to companies in the Russell 2000 Index or the S&P SmallCap 600. The small-cap fund invests in both domestic and foreign companies and in growth or value stocks. It may invest without limit in preferred stocks and investment-grade debt on a short-term basis.
The small-cap fund has an expense ratio of 0.96% against a category average of 1.41%. As of October 2009, it has a portfolio turnover of 92% against a category average of 91%. The fund’s top holdings include Alliance Data Systems Corporation, XL Capital, Ltd, and Assured Guaranty, Ltd. As of December 2009, it had outperformed the Russell 2000 Index for the 1-year, 3-year and 5-year periods.
Andrew Sassine has been lead manager of the fund since July 2008. Sasine has been with Fidelity Investments since 1999 and has been managing the fund since its inception.
Skyline Special Equities (SKSEX) seeks capital appreciation by investing in undervalued common stock. It was incepted in April 1987.
The small-cap fund selects companies which are undervalued and have good earnings growth prospects. The small-cap fund considers companies with market capitalizations similar to those in the Russell 2000 index or S&P SmallCap 600 index.
The small-cap fund has an expense ratio of 0.96% against a category average of 1.52%. As of November 2009, it has a portfolio turnover of 47% compared to a category average of 86%. The fund’s top holdings include Gildan Activewear, Inc A, TNS, Inc and Reinsurance Group of America. As of December 2009, the fund has outperformed the Russell 2000 and Russell 2000 Value Indexes for the 1-year and 5-year periods.
Mark N. Odegard has been lead manager of the fund since January 2005. Odegard has been a partner of the firm since 1999.
The Delafield Fund (DEFIX) seeks long-term growth of capital. It was incepted in November 1993.
Domestic companies believed to be undervalued constitute the majority of the small-cap fund’s investments. The fund invests 65% of its assets in common stocks, convertible securities or rights or warrants purchasing common stocks. The small-cap fund invests not more than 35% of its total assets in debt securities and preferred stocks, whose prices are expected to increase significantly.
The small-cap fund has an expense ratio of 1.49% against a category average of 1.36 %. It has an annual portfolio turnover of 81% against a category average of 93%. The fund’s top holdings include AIM STIT Treasury Institutional, Flextronics International, Ltd. and Thermo Fisher Scientific, Inc. As of December 2009, it has outperformed the S&P 500 and the Russell 2000 Indexes for the 1-year, 3-year and 5-year periods.
J. Dennis Delafield has been lead manager of the fund since November 1993. Delafield was with Reich & Tang Asset Management, LLC, Delafield Asset Management, Inc. and David J. Greene & Company, before his current assignment.
Investors can find small-cap funds by checking out the entire list of the Zacks ranked Small-Cap Equity Funds.
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