3 Best-Ranked Small-Cap Growth Funds
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. Small cap funds generally invest in companies having market cap less than $2 billion. The companies, smaller in size, offer growth potential and their market capitalization may increase subsequently. Less international exposure make small-cap funds less vulnerable to the 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 other fund classes. Below we share with you 3 top-rated, small-cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all small-cap growth mutual funds, investors can click here to see the complete list of small-cap growth funds . Fidelity Advisor Small Cap Growth A (MUTF: FCAGX ) invests the lion’s share of its assets in common stocks of small cap growth companies. FCAGX invests in securities issued throughout the globe. FCAGX considers factors including financial strength and economic condition for investing in a company. The Fidelity Advisor Small Cap Growth A fund has a three-year annualized return of 10.3%. FCAGX has an expense ratio of 1.20% as compared to the category average of 1.33%. RidgeWorth Small Cap Growth Stock I (MUTF: SSCTX ) seeks growth of capital over the long run. SSCTX invests a large chunk of its assets in securities of small cap companies that are traded in the U.S. SSCTX invests in companies having market capitalizations within the range of in the Russell 2000 Growth Index. SSCTX may also invest in American Depositary Receipts. The RidgeWorth Small Cap Growth Stock I fund has a three-year annualized return of 4.7%. As of December 2015, SSCTX held 91 issues with 2.87% of its assets invested in Heartland Payment Systems Inc. BlackRock Small Cap Growth Equity Investor A (MUTF: CSGEX ) invests the major portion of its assets in equity securities of domestic companies having small size market capitalization. According to CSGEX advisors, companies with a market cap similar to those included in the Russell 2000 Index are considered small cap firms. CSGEX may also participate in IPO markets. The BlackRock Small Cap Growth Equity Investor A fund has a three-year annualized return of 5.8%. Travis Cooke is the fund manager of CSGEX since 2013. To view the Zacks Rank and past performance of all small-cap growth mutual funds, investors can click here to see the complete list of funds .