Top 5 Small Cap Funds - Mutual Fund Commentary
For investors who have the willingness to take short term positions and the ability to bear a certain degree of risk, small-cap funds could be the correct choice. These funds generate significant demand driven sales during a market upswing, which lead to an increase in their prices. Smaller firms also look to continuously reinvest their profits back into their business. This reassures shareholders of superior performance and higher profit potential from such companies. Small Cap funds therefore make excellent additions to a well-diversified portfolio.
Below we will share with you 5 top rated small-cap funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all small-cap funds, then click here.
Goldman Sachs Structured Small Cap Equity A (GCSAX) seeks capital appreciation. The majority of its assets are invested in domestic small-cap companies. This includes foreign securities traded in U.S. markets. The companies in its portfolio are identical to those included in the Russell 2000 index. This small-cap fund returned 67.84% over the last one year period.
The small-cap fund has a minimum initial investment of $1,000 and an expense ratio of 1.25% compared to a category average of 1.42%.
Waddell & Reed Small Cap A (UNSAX) invests heavily in common stocks of small-cap companies. It focuses on domestic companies but may also consider foreign companies. It primarily invests in newer companies or in smaller firms from emerging industries with the scope for rapid growth. The fund has a five year annualized return of 4.56%.
As of December 2009, this small-cap fund held 44 issues, with 4.98% of its total assets invested in Micros Systems, Inc.
Aberdeen Small Cap A (GSXAX) seeks long-term capital growth. It invests at least 80% of its assets in small-cap companies included in the Russell 2000 Index. These companies have market capitalizations ranging from $14 million to $4.8 billion. The fund returned 66.81% in the last one year period.
Jason J. Kotik is the fund manager and he has managed this small-cap fund since 2008.
Fidelity Small Cap Stock (FSLCX) invests the majority of its assets in small-cap companies. The companies considered for investment purposes must be similar to those included in the Russell 2000 Index or the S&P SmallCap 600 Index. It may temporarily purchase preferred stock and debt securities rated investment grade. It is a no-load fund.
This small-cap fund returned 99.26% over the last one year period and has a ten year annualized return of 5.75%.
Pacific Advisors Small Cap A (PASMX) seeks long-term capital appreciation by investing in small-cap companies. At least 80% of its assets are invested in companies with market capitalizations up to $2 billion. Stocks of companies with market capitalizations below $500 million make up a substantial portion of the fund’s portfolio. The fund has a ten year annualized return of 9.1%.
The fund manager is George A. Henning and he has managed this small-cap fund since 1995.
To view the Zacks Rank and past performance of all small-cap funds, then click here.
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. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/
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