Investors with a high-risk appetite and an interest in growth and value investing may choose small-cap blend mutual funds to boost their portfolio. While blend funds, also known as “hybrid funds,” aim for value appreciation through capital gains, small-cap funds have higher growth prospects than their large and medium counterparts. Blend funds provide significant exposure to both growth and value stocks, and owe their origin to a graphical representation of a fund’s equity style box.
Funds investing the majority of their assets in securities of companies with a market capitalization below $2 billion are generally considered small-cap mutual funds. Although funds investing in small-cap stocks are believed to have more exposure to market volatility than large or medium ones, they are also expected to provide diversification across sectors and companies. Moreover, small-cap companies are believed to be less affected by a global downturn, thanks to less international exposure.
Below, we share with you three top-ranked small-cap blend mutual funds, namely FullerThaler Behavioral Small-Cap Equity Fund Investor Shares (FTHNX – Free Report) , T. Rowe Price Integrated U.S. Small-Mid Cap Core Equity Fund (TQSMX – Free Report) and Vanguard Explorer Value Investor (VEVFX – Free Report) . 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.
FullerThaler Behavioral Small-Cap Equity Fund Investor Shares invests most of its net assets in common stocks of small-cap companies based in the U.S. The fund has returned 10.9% over the past three years.
As of December 2023, FTHNX held 109 issues, with 2.9% of its assets invested in Bank OZK.
T. Rowe Price Integrated U.S. Small-Mid Cap Core Equity Fund invests most of its assets in common stocks of small and mid-cap companies. TQSMX advisors use the Russell 2500 index as a benchmark to select the companies to invest in. The fund has returned 9.4% over the past three years.
TQSMX has an expense ratio of 0.87%.
Vanguard Explorer Value Investor invests in small-cap domestic equity securities that it considers undervalued. VEVFX selects securities that have above-average dividend yields.The fund has returned 5.1% over the past three years.
John W. Rogers has been one of the fund managers of VEVFX since January 2022.
To view the Zacks Rank and the past performance of all small-cap blend mutual funds, investors can click here to see the complete list of small-cap blend mutual funds.
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