A small-cap value fund is a good choice for investors looking for diversification across sectors and companies and to focus on exposure to stock trading at lower prices. Investors with high risk appetite invest in these funds. Small-cap funds generally invest in companies with a market capitalization of less than $2 billion. The companies, being smaller in size, offer growth potential and can subsequently see an increase in market capitalization.
Value stocks are those that trade at a price below their fundamentals (ie, earnings, book value, debt equity). Investing in mutual funds for income or capital gains is a common practice.
However, not all value funds consist of companies that primarily use them to pay out their profits. Investors interested in choosing value funds for yield should check the mutual fund yield, which is the total dividend divided by the value of the mutual fund’s shares.
Below, we share with you three top-rated small-cap value mutual funds. Bridgeway Small Cap Value Fd (BRSVX – free report), Hotchkiss & Wiley Small Cap Value Fund (HWSIX – free report) and Invesco Small Cap Value Fd (VSCAX – free report). Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to view the complete list of Small Cap Value Mutual Funds.
Bridgeway Small Cap Value Fd It seeks long-term total return through capital appreciation. BRSVX invests the majority of its net assets in stocks listed on the New York Stock Exchange, NYSE American and Nasdaq in the small-cap value category.
Bridgeway Small Cap Value FD has a three-year annualized return of 23.3%. In the year As of June 2022, BRSVX held 124 issues, with 2% of its assets invested in Archbest Corporation.
Hotchkiss & Wiley Small Cap Value Fund It seeks capital appreciation and invests most of its net assets and liabilities in equity securities of small-cap companies. HWSIX refers to the Russell 2000 Index for classifying companies as small caps.
Hotchkis & Wiley Small Cap Value Fund has a three-year annualized return of 15%. HWSIX has an expense ratio of 1.06% compared to the category average of 1.16%.
Invesco Small Cap Value Fd It seeks long-term capital growth by investing most of its net assets in the securities of small-cap companies. VSCAX invests primarily in common stocks.
Invesco Small Cap Value Fd has a three-year annualized return of 18.7%. Jonathan Muller has been one of the VSCAX fund managers since 2010.
To view the Zacks Rank and past performance of small-cap value mutual funds, investors can click here to view the full list of small-cap value mutual funds.
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