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3 Small-Cap Growth Mutual Funds Worth Betting On

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Small-cap funds generally invest in companies having a market cap less than $2 billion. The companies, smaller in size, offer growth potential and their market capitalization may increase subsequently. Less international exposure makes small-cap funds less vulnerable to a stronger U.S. dollar. Though small-cap stocks are believed to provide greater returns, they are also expected to be more volatile than large and mid-cap companies. Also, growth funds may experience more fluctuations than the other fund classes.

Risky investors who prefer capital appreciation over dividend payouts may consider investing in small-cap growth mutual funds. Growth funds focus on realizing an appreciable amount of capital growth by investing in stocks 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.

Below, we share with you three top-ranked small-cap growth mutual funds, namely, Oberweis Small-Cap Opportunities Fund OBSOX, AMG Frontier Small Cap Growth Fund Class I MSSCX and Boston Trust Walden Small Cap Fund BOSOX. 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 funds.

Oberweis Small-Cap Opportunities Fund invests most of its net assets in securities of companies small-cap companies, which its advisors believe have the potential for significant long-term growth in market value. OBSOX invests in companies that have a market capitalization of less than $5 billion or with a market capitalization within the range of companies that are listed on the Russell 2000 Index at the time of purchase.

Oberweis Small-Cap Opportunities Fund has three-year annualized returns of 21.3%. As of the end of December 2021, OBSOX had 70 issues and 5.28% of its assets invested in Synaptics Inc.

AMG Frontier Small Cap Growth Fund Class I invests most of its assets along with borrowings if any in common stocks of small-capitalization U.S. companies at the time of purchase. MSSCX can invest in common stocks that are traded in the over-the-counter market.

AMG Frontier Small Cap Growth Fund Class Ihas three-year annualized returns of 16.5%. MSSCX has an expense ratio of 0.95% compared with the category average of 1.21%.

Boston Trust Walden Small Cap Fund invests most of its net assets in domestic equity securities of small-cap companies. BOSOX invests in companies that have a market capitalization similar to the companies that are part of the Russell 2000A Index at the time of purchase.

Boston Trust Walden Small Cap Fundhas three-year annualized returns of 13.4%. Kenneth P. Scott has been the fund manager of BOSOX since December 2005.

To view the Zacks Rank and the past performance of all small-cap growth mutual funds, investors can click here to see the complete list of small-cap growth mutual funds.

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