3 Best-Ranked Small-Cap Value Funds For Higher Return
Small-cap value mutual funds provide excellent choices for investors who are looking for bargain, i.e., stocks at a discount, with an impressive growth potential. Value mutual funds are those that invest in stocks trading at discounts to book value, have a low price-to-earnings ratio and high dividend yields. Value investing has always been popular, and for a good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlooks and decent dividends? Meanwhile, a small-cap fund is a good choice for investors with a high risk appetite as companies with small market capitalization are expected to have higher growth potential than large- and mid-cap companies. Small-cap funds generally invest in companies having market cap lower than $2 billion. Also, small-cap funds are expected to provide diversification across sectors and companies. Below, we share with you three top-rated, small-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the funds to outperform its peers in the future. CRM Small Cap Value Investor (MUTF: CRMSX ) seeks capital growth over the long run. CRMSX invests a large chunk of its assets in equity securities of small-cap companies that are believed to be undervalued. CRMSX invests in securities of companies having market capitalization similar to those listed in the Russell 2000 Value Index. CRMSX invests in companies throughout the globe but traded in the US. The CRM Small Cap Value Investor fund has a three-year annualized return of 13.2%. CRMSX has an expense ratio of 1.09% as compared to the category average of 1.23%. Nuveen NWQ Small/Mid-Cap Value A (MUTF: NSMAX ) invests the lion’s share of its assets in companies with market capitalization within range of the Russell 2500 Value Index. Though NSMAX invests in both small- and mid-cap companies, currently, it has major parts of its assets invested in small-cap stocks. NSMAX invests a maximum of 35% of its assets in foreign companies with not more than 10% of its assets allocated in companies from emerging economies. The Nuveen NWQ Small/Mid-Cap Value A fund has a three-year annualized return of 9.5%. Phyllis G. Thomas is the fund manager of NSMAX since 2010. JPMorgan Small Cap Value A (MUTF: PSOAX ) seeks long-term capital appreciation. PSOAX uses the value-based strategy to invest in equity securities of small-cap firms having market capitalization similar to those included in the Russell 2000 Value Index. PSOAX primarily invests in common stocks and REITs. The JPMorgan Small Cap Value A fund has a three-year annualized return of 11.8%. As of August 2015, PSOAX held 391 issues with 1.16% of its assets invested in Cooper Tire & Rubber Co (NYSE: CTB ). Original Post