Published on 29 Apr 2022 on Zacks via Yahoo Finance

3 Small-Cap Blend Mutual Funds for Great Returns

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 by 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 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 Vanguard Explorer Value Fund Investor Shares VEVFX, Penn Capital Special Situations Small Cap Equity Fund Institutional Class PSCNX and Vanguard Strategic Small-Cap Equity Fund Investor Shares VSTCX. 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.