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Grab These 3 Small-Cap Value Mutual Funds for Solid Returns

Small-cap value mutual funds provide excellent choices for investors looking for bargains, i.e, stocks at a discount with impressive growth potential. Value mutual funds comprise stocks trading at a discount to book value, low price-to-earnings ratios and high dividend yields.

Value investing is a very popular strategy, and for a good reason. After all, who doesn’t want to find stocks with low PEs, solid outlooks and decent dividends? Added to that, small-cap funds are good choices for investors with a high-risk appetite, as companies with small market capitalizations are expected to have higher growth potential than large- and mid-cap companies. Small-cap funds generally invest in companies having a market cap lower than $2 billion. Also, small-cap funds are expected to provide diversification across different sectors and companies.

Below, we share with you three top-ranked small-cap value mutual funds, namely, Bridgeway Omni Small-Cap Value BOSVX, Sterling Capital Behavioral Small Cap Value Equity SPSAX and Invesco Small Cap Value VSCAX. 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 see the complete list of Small Cap Value mutual funds.

Bridgeway Omni Small-Cap Value seeks a long-term total return on capital. BOSVX 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.

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Bridgeway Omni Small-Cap Value has a three-year annualized return of 6.4%. As of December 2023, BOSVX held 561 issues, with 0.9% of its assets invested in M/I Homes.

Sterling Capital Behavioral Small Cap Value Equity seeks a long-term total return on investment. SPSAX invests in small-cap companies, defining them as firms with market capitalizations within the range of those companies on the Russell 2000 Index at the time of purchase.

Sterling Capital Behavioral Small Cap Value Equity has a three-year annualized return of 5.2%. SPSAX has an expense ratio of 1.11%.

Invesco Small Cap Value seeks long-term capital growth by investing the majority of its net assets in the under-valued securities of small-cap companies. VSCAX invests primarily in common stock.

Invesco Small Cap Value has a three-year annualized return of 13%. Jonathan Mueller has been one of the fund managers of VSCAX since June 2010.

To view the Zacks Rank and the past performance of all small-cap value mutual funds, investors can click here to see the complete list of small cap value mutual funds.

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