Yahoo Finance 3 Top-Ranked Small-Cap Growth Mutual Funds for Lucrative Returns
Small-cap funds generally invest in companies having a market cap of 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.
Although small-cap stocks are believed to provide greater returns, they are expected to be more volatile than large and mid-cap companies. Also, growth funds may experience more fluctuations than the other fund classes.
Risk-taking investors, who prefer capital appreciation over dividend payout, may consider 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 small-cap growth mutual funds, namely Invesco Discovery OPOCX, Vanguard Explorer Investor Shares VEXPX and Harbor Small Cap Growth HISGX. 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.
Invesco Discovery fund invests most of its net assets in common stocks of small-capitalization companies, which portfolio managers believe have favorable growth prospects. OPOCX advisors consider small-cap companies as those with market capitalization similar to those listed on the Russell 2000 Growth Index at the time of purchase.
Invesco Discovery fund has five-year annualized returns of 11.9%. As of the end of November 2023, OPOCX had 101 issues and 2.6% of its assets were invested in Hamilton Lane.
Vanguard Explorer Fund Investor Shares fund aims for long-term capital appreciation by investing in small and medium-cap companies. VEXPX advisors choose to invest in companies based on superior growth potential.
Vanguard Explorer Fund Investor Shares fund has returned 11.2% in the past five years. VEXPX has an expense ratio of 0.45%.
Harbor Small Cap Growth fund invests most of its assets, along with borrowings, if any, in common and preferred stocks of small-cap companies. HISGX advisors consider small companies as those with market capitalization within the range of companies listed on the Russell 2000 Growth Index.
Harbor Small Cap Growth has five-year annualized returns of 10.6%.William A. Muggia has been the lead fund manager of HISGX since the end of October 2000.
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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