Small-cap growth funds are natural choices for investors with a high-risk appetite when capital appreciation over the long term takes precedence over dividend payouts. These funds focus on realizing an appreciable amount of capital growth by investing in stocks projected to rise in value over the long term.
Moreover, small-cap funds are good choices for investors seeking diversification across different sectors and companies. These 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. Also, due to their lower international exposure, small-cap funds offer higher protection than their large- and mid-cap counterparts against any global downturn.
Below, we share with you three top-ranked Small-cap growth mutual funds, viz., Northern Small Cap Core Fund NSGRX, Putnam Small Cap Growth PNSAX and T. Rowe Price Integrated US Sm Gr Eq PRDSX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Northern Small Cap Core Fund seeks to provide long-term capital appreciation. NSGRX invests most of its net assets in the equity securities of small capitalization companies.
Northern Small Cap Core Fund has three-year annualized returns of 2.6%. NSGRX has an expense ratio of 0.59%.
Putnam Small Cap Growth fund seeks capital appreciation. PNSAX invests mainly in common stocks of U.S. companies, with a focus on growth stocks.
Putnam Small Cap Growth has three-year annualized returns of 2%. As of June 2024, PNSAX held 92 issues with 2.2% of its assets invested in Nova Ltd.
T. Rowe Price Integrated US Sm Gr Eq fund seeks long-term capital appreciation by investing primarily in common stocks at small growth companies. PRDSX advisors also invest in small-cap growth companies defined as companies whose market capitalization is within the range of smaller companies in the Standard & Poor’s 500 Stock Index.
T. Rowe Price Integrated US Sm Gr Eq has three-year annualized returns of 1.9%. David Corris has been one of the fund managers of PRDSX since 2024.
To view the Zacks Rank and the past performance of all small-cap growth mutual funds, investors can click here to see the complete list of small-cap growth mutual funds.
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