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5 Best Performing Small Cap Mutual Funds Year to Date

Zacks Equity Research

Investors having a high risk appetite and looking for significantly high returns often choose small-cap funds. These funds diversify the risk inherent in small cap stocks and have high growth potential. Since they focus on small cap companies there is the added advantage of higher flexibility due to the quicker decision making of these firms. Investors willing to remain invested for longer periods who can withstand high volatility should invest in small cap funds to earn substantially profits.

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, investors can click here to see the complete list of funds.

Mutual Fund

Zacks Rank

Total Return YTD

ProFunds UltraSmall Cap Investor

#1 Strong Buy

50.86%

Bridgeway Ultra-Small Company

#1 Strong Buy

40.07%

Lord Abbett Developing Growth A

#1 Strong Buy

34.53%

Managers Micro-Cap Service

#1 Strong Buy

33.73%

Pacific Advisors Small Cap Value A

#2 Buy

33.71%

ProFunds UltraSmall Cap Investor (UAPIX) seeks to provide daily returns which are twice as much as the daily performance of the Russell 2000 Index. The fund purchases equity securities and derivatives which have similar return characteristics. This small-cap mutual fund is non-diversified and has returned 75.66% over the last one year period.

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The small-cap mutual fund has a minimum initial investment of $15,000 and an expense ratio of 1.89% compared to a category average of 1.31%.

Bridgeway Ultra-Small Company (BRUSX) invests a large share of its assets in a wide range of “ultra-small companies”. A maximum of 15% of its assets are invested in foreign instruments. This small-cap mutual fund returned 58.20% over the last one year period.

The fund manager is John Montgomery and he has managed this small-cap mutual fund since 1994.

Lord Abbett Developing Growth A (LAGWX) seeks capital growth on a long-term basis. Investments are made in those companies which are primarily undervalued and have the potential to grow. A minimum of 65% of its assets are utilized to invest in small companies including the domestic and foreign ones. This small-cap mutual fund returned 37.40% over the last one year period.

As of June 2013, this small-cap mutual fund held 114 issues, with 1.78% of its total assets invested in Pandora Media, Inc.

Managers Micro-Cap Service (MMCFX) invests in small cap domestic companies whose market cap is within the band of market cap of companies listed in Russell Microcap Index . This small-cap mutual fund returned 43.13% over the last one year period.

The small-cap mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.41% compared to a category average of 1.43%.

Pacific Advisors Small Cap Value A (PASMX) seeks capital growth. The fund invests the majority of its assets in small cap companies. These firms must have a market capitalization not exceeding $2 billion. This small-cap mutual fund returned 45.22% over the last one year period.

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

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

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.

Read the analyst report on UAPIXRead the analyst report on BRUSXRead the analyst report on LAGWXRead the analyst report on MMCFXRead the analyst report on PASMXZacks Investment Research