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When capital appreciation over the long term takes precedence over dividend payouts, growth funds become a natural choice for investors. These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes. Meanwhile, small cap funds are a good choice for investors seeking diversification across different sectors and companies. Investors with a high risk appetite should invest in these funds. Small cap funds generally invest in companies having a market cap lower than $2 billion. The companies, smaller in size, offer growth potential, and their market capitalization may increase subsequently. Below we will share with you 5 buy-rated small cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #2 (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 growth funds, investors can click here to see the complete list of funds. Oppenheimer Discovery Fund A (MUTF: OPOCX ) primarily focuses on acquiring common stocks of domestic companies having impressive growth potential. It invests in securities of small cap companies having market capitalizations below $3 billion. The Oppenheimer Discovery A fund has a three-year annualized return of 13.3%. OPOCX has an expense ratio of 1.12%, as compared to a category average of 1.33%. Fidelity Small Cap Growth Fund A (MUTF: FCAGX ) seeks capital growth. The fund invests a lion’s share of its assets in common stocks of small cap growth companies. It invests in securities issued throughout the globe. FCAGX considers factors including financial strength and economic condition for investing in a company. The fund has a three-year annualized return of 16.8%. Patrick Venanzi is the fund manager and has managed FCAGX since 2011. Consulting Group Small Cap Growth Fund No Load (MUTF: TSGUX ) invests a large chunk of its assets in securities of companies having market capitalizations similar to those listed in the Russell 2000 Growth Index over the past one-year period or companies with market cap size below $3 billion. TSGUX may invest a maximum of 10% of its assets in securities of companies located in the foreign land and which are not traded within the boundary of the US. The fund has a three-year annualized return of 15.9%. As of August 2015, TSGUX held 167 issues, with 1.62% of its assets invested in PolyOne Corp. JPMorgan Small Cap Growth Fund A (MUTF: PGSGX ) seeks capital appreciation over the long run. It invests a major portion of its assets in securities of companies having market capitalizations identical to those included in the Russell 2000 Growth Index. PGSGX may also consider companies with market cap less than $4 billion for investment purpose. The fund has a three-year annualized return of 13.7%. Eytan M. Shapiro is the fund manager and has managed PGSGX since 2004. Putnam Small Cap Growth Fund A (MUTF: PNSAX ) invests in common stocks of domestic companies having market capitalizations within the universe of the Russell 2000 Growth Index. It primarily invests in securities of companies that are believed to have above-average growth prospect. The fund has a three-year annualized return of 15.3%. As of June 2015, PNSAX held 276 issues, with 1.88% of its assets invested in Jazz Pharmaceuticals PLC. Original Post Scalper1 News
Scalper1 News