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5 Small-Cap Growth Mutual Funds To Consider

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 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 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 . T. Rowe Price Diversified Small Cap Growth Fund (MUTF: PRDSX ) invests a large chunk of its assets in growth oriented companies having market capitalizations similar to those listed in the MSCI US Small Cap Growth Index. PRDSX is expected to maintain a diversified portfolio with a maximum of half of its assets invested in the top 25 holdings. The T. Rowe Price Diversified Small Cap Growth fund has returned 12.4% in the year-to-date frame. Sudhir Nanda is the fund manager and has managed PRDSX since 2006. ClearBridge Small Cap Growth Fund A (MUTF: SASMX ) seeks capital appreciation over the long run. SASMX invests a major portion of its assets in equities of small-cap firms. SASMX invests in domestic companies that believed to have impressive growth prospect. The ClearBridge Small Cap Growth A fund has returned 5.5% in the past one year. SASMX has an expense ratio of 1.24% as compared to a category average of 1.35%. Eaton Vance Small-Cap Fund A (MUTF: ETEGX ) invests a lion’s share of its assets in small-cap firms having above-average growth potential. ETEGX focuses on acquiring common stocks of companies. ETEGX may invest a maximum of one-fourth of its assets in non-US companies including those from emerging economies. The Eaton Vance Small-Cap A fund has returned 7.5% in past one year. As of March 2015, ETEGX held 64 issues with 2.43% of its assets invested in West Pharmaceutical Services (NYSE: WST ). WesMark Small Company Growth Fund (MUTF: WMKSX ) seeks long-term capital growth. WMKSX maintains a diversified portfolio by investing a large portion of its assets in small-cap companies. WMKSX defines small-cap companies as those which have market cap size within the universe of the Russell 2000 Index or the Standard & Poor’s SmallCap 600 Index. The WesMark Small Company Growth fund has returned 2% in past one year. WMKSX has an expense ratio of 1.22% as compared to category average of 1.35%. TCW Small Cap Growth Fund (MUTF: TGSCX ) invests a majority of its assets in companies having market capitalizations identical to those included in the Russell 2000 Growth Index. TGSCX may also invest in non-US firms including those located in developing and emerging countries, and ADRs. The TCW Small Cap Growth fund has returned 13.5% in the past one year. Chang Lee is the fund manager and has managed TGSCX since 2012. Original post

Puerto Rico Debt Worries Loom: 2 ETFs To Watch

While Greece recently defaulted on its payments to the International Monetary Fund, America’s island Puerto Rico has managed to avert a last minute July 1 default giving some relief to its creditors. The island has paid back $645 million of general obligation bonds along with a $415 million installment from the troubled Puerto Rico Electric Power Authority (PREPA). Moreover, Puerto Rico has paid back a short-term bank loan of about $245 million. Though the last minute payment has helped the island to buy some time to negotiate with its creditors, it still has a huge debt load to repay in the coming months and years. In fact, the island has a massive debt load of $72 billion amassed by the government and its agencies. The government owned utility company – PREPA – is crippled by debt and is in talk with creditors to renegotiate its $9 billion of debt. Though Puerto Rico has managed to avert the default, Moody’s Investors Service has cut about $56 billion of Puerto Rico’s other bonds into junk category . The island has been in recession for nearly a decade and there are meager chances of its paying back its debt. This is especially true as many residents of the island are moving to the mainland U.S. in search of better job opportunities which further reduces the island’s tax base. The island’s debt problems also have a significant bearing on the financial market and the investor community, given the fact “estimated in 2013 that 180 mutual funds in the United States and elsewhere have at least 5% of their portfolios in Puerto Rican bonds,” as per investment research firm Morningstar, in a report for USA Today . Apart from mutual funds, a lot of ETFs also have exposure to Puerto Rican debt. Below we have highlighted two ETFs which have significant exposure to Puerto Rican bonds. SPDR Nuveen S&P High Yield Municipal Bond ETF (NYSEARCA: HYMB ) The fund tracks the S&P Municipal Yield Index, measuring the performance of high yield municipal bonds issued by U.S. states and territories or local governments or agencies. Puerto Rico takes the second spot with 10.45% exposure in the fund, ahead of California which has 12.7% allocation. The fund has a portfolio of 432 bonds with an average maturity of 19.74 years and a 30-day SEC yield of 4.60%. Sector-wise, Industrial Revenue takes the top spot with 28.3% allocation, followed by Healthcare and Special Tax each with double-digit exposure. The fund manages an asset base of $393.5 million and trades with moderate volume of 75,000 shares a day. The ETF currently has a Zacks Rank #4 or Sell rating. Short High-Yield Municipal Index ETF (NYSEARCA: SHYD ) The fund tracks The Barclays Municipal High Yield Short Duration Index giving exposure to the high-yield municipal bond market. The fund holds a total of 328 bonds with a modified duration of 3.96 years and a weighted average maturity of 7.23 years. SHYD has a 30-day SEC yield of 3.39%. Puerto Rico has 4.5% weightage in the fund. Sector-wise, Industrial Revenue takes the top spot with a little more than one-third assets, followed by HealthCare (22.6%) and Transportation (10.1%). The fund manages a small asset base of $105.4 million and trades with low volume of less than 30,000 shares a day. SHYD also has a Zacks Rank #4. Original Post

5 Aggressive Growth Mutual Funds To Buy For High Growth

When capital appreciation over the long term takes precedence over dividend payouts, growth funds become a natural choice for investors. However, investors looking for highest capital gains should look no further than investing in aggressive growth mutual funds. These funds invest in companies that show high growth prospects, but that comes with the risk of share price fluctuations. This category of funds also invests heavily in undervalued stocks, IPOs and relatively volatile securities in order to profit from them in a congenial economic climate. Securities are selected on the basis of their issuing company’s potential for growth and profitability. Below we will share with you 5 buy-rated Aggressive Growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) or Zacks Mutual Fund Rank #2 (Buy) as we expect these mutual funds to outperform their peers in the future. Hartford Growth Opportunities Fund A (MUTF: HGOAX ) invests in a broad range of common stocks from diversified industries and companies that the sub-adviser considers to have superior growth prospects. HGOAX focuses on mid to large cap stocks and a maximum of 25% may be invested in non-US issuers and non-dollar securities. HGOAX has a three-year annualized return of 21.6%. Hartford Growth Opportunities A has an expense ratio of 1.15% compared to a category average of 1.19%. Fidelity Growth Strategies (MUTF: FDEGX ) seeks capital appreciation. FDEGX invests primarily in common stocks of domestic and foreign issuers that the management believes offer potential for accelerated earnings or revenue growth. FDEGX focuses on investments in medium-sized companies, but it may also invest substantially in larger or smaller companies. FDEGX has a three-year annualized return of 21.1%. As of May 2015, FDEGX held 123 issues, with 2.41% of its total assets invested in Avago Technologies (NASDAQ: AVGO ) PrimeCap Odyssey Aggressive Growth (MUTF: POAGX ) invests in U.S. companies having rapid earnings growth potential. Though POAGX invests across market sectors and market caps, it has historically invested most of its assets in mid to small cap firms. This high yield mutual fund has a three-year annualized return of 8.7%. POAGX has a three-year annualized return of 25.3%. Theo A. Kolokotrones is the fund manager and has managed this fund since 2004. Vantagepoint Aggressive Opportunities Fund (MUTF: VPAOX ) seeks capital growth over the long term. It invests using an actively managed strategy in stocks of small to mid cap domestic and foreign firms, which are believed to have high capital growth prospects. The fund also invests in stocks listed in a custom version of the Russell Midcap Growth Index. VPAOX has a three-year annualized return of 25.3%. Vantagepoint Aggressive Opportunities Investor has an expense ratio of 0.83% compared to a category average of 1.30%. ClearBridge Aggressive Growth Fund A (MUTF: SHRAX ) seek capital appreciation. SHRAX invests in companies that the manager believes are growing or will improve earnings at a faster rate than companies included in the S&P 500 Index. SHRAX invests a significant portion of its assets in small and medium-sized companies. SHRAX has a three-year annualized return of 21.9%. As of June 2015, SHRAX held 71 issues, with 9.3% of its total assets invested in Biogen Inc. (NASDAQ: BIIB ) Original Post