Top 5 Best Performing Small Cap Mutual Funds - Best Performing Funds Year To Date

Investors looking to mop up handsome gains over a short run often invest in small cap funds. Though riskier in character than other fund categories, these funds have the ability to deliver appreciably higher returns due to two primary reasons. Firstly, they generate high volumes of sales in a booming market, leading to a rise in prices. In addition, research has shown that smaller firms reinvest their profits back into their business. This reassures shareholders of better performance over the long term

Below we will share with you 5 top rated small-cap mutual funds. Each has earned a Zacks #1 Rank (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 funds, then click here.

Virtus Small-Cap Sustainable Growth A (PSGAX) invests heavily in common stocks of small cap companies. These companies must have market capitalizations within the range of firms which are part of the Russell 2000 Growth Index. At any point in time the fund holds a portfolio of 20 to 35 securities. The small-cap mutual fund has a five year annualized return of 3.71%.

The fund manager is Todd A. Beiley and he has managed this small-cap mutual fund since 2008.

LKCM Aquinas Small Cap (AQBLX) seeks capital growth over the long-term. The fund invests a large share of its assets in small cap companies. These firms must have market capitalizations between $400 million and $2.5 billion. This small-cap mutual fund returned 45.64% over the last one year period.

The small-cap mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.50% compared to a category average of 1.52%.

Pacific Advisors Small Cap Value A (PASMX) invests the majority of its assets in small-cap companies, which are firms with a maximum market cap of $2 billion. The fund invests heavily in micro-cap stocks, which are stocks issued by companies with market capitalizations not exceeding $500 million. The small-cap mutual fund has a ten year annualized return of 9.99%.

The fund manager is George A. Henning and he has managed this small-cap mutual fund since 1993.

Praxis Small Cap A (MMSCX) seeks capital appreciation over the long term. A large proportion of the fund's assets are utilized to purchase equity securities of small-cap companies. The fund seeks to acquire common stocks, related convertible securities, warrants and fixed-income securities. This small-cap mutual fund returned 44.21% over the last one year period.

As of July 2011, this small-cap mutual fund held 78 issues, with 2.53% of its total assets invested in Crocs, Inc.

Longleaf Partners Small-Cap (LLSCX) invests heavily in equity securities of small-cap companies which are attractively priced compared to their underlying value. Not more than 30% of its assets are utilized to purchase foreign securities, including those issued from emerging markets. This small-cap mutual fund has a three year annualized return of 11.17%.

The small-cap mutual fund has an expense ratio of 0.93% compared to a category average of 1.36%.

To view the Zacks Rank and past performance of all small-cap mutual 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.