3 Top-Rated Small-Cap Blend Mutual Funds Worth Betting On

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Risk-loving investors, who give precedence to capital appreciation along with dividend payouts, may consider small-cap blend mutual funds to derive healthy returns. These funds focus on realizing an appreciable amount of capital growth by investing in stocks that are projected to rise over the long term.

Small-cap funds are good choices for investors seeking diversification across different sectors and companies. They 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 less international exposure, small-cap funds offer higher protection than their large and mid-cap counterparts in any global downturn.

Below, we share with you three top-rated, small-cap blend mutual funds, namely PGIM Jennison Small Company Fund (PGOAX - Free Report), TIAA-CREF Quant Small-Cap Equity Fund (TCSEX - Free Report) and Touchstone Small Cap Fund (TSFAX - Free Report). Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.

PGIM Jennison Small Company Fund invests most of its net assets in equity and equity-related instruments of small-cap companies that, according to its advisors, are relatively undervalued and have both value and growth characteristics. PGOAX advisors invest in companies with a market capitalization less than the largest market capitalization company on the Russell 2500 Index during the time of purchase.

PGIM Jennison Small Company Fund has three-year annualized returns of 18.0%. As of the end of March 2023, PGOAX had 120 issues and invested 2.5% of its net assets in Targa Resources.

TIAA-CREF Quant Small-Cap Equity Fund invests most of its net assets in small-cap equity securities with market capitalization similar to the companies listed on the Russell 2000 Index at the time of purchase. TCSEX advisors generally invest in domestic companies in various sectors with acceptable growth rates and valuations.

TIAA-CREF Quant Small-Cap Equity Fund has three-year annualized returns of 16.1%. TCSEX has an expense ratio of 0.71% compared with the category average of 1.03%.

Touchstone Small Cap Fund invests most of its assets, along with borrowings, if any, common stocks of domestic small-cap companies with market capitalization similar to the companies listed on the Russell 2000 Index, the S&P SmallCap 600 Index, or the Dow Jones U.S. Small Cap Total Stock Market Index at the time of purchase. TSFAX advisors generally change the size of the companies in these indices according to market conditions.

Touchstone Small Cap Fund has three-year annualized returns of 16.0%. Stephen M. Goddard has been one of the fund managers of TSFAX since September 2009.


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