Small-cap blend funds are a type of equity mutual funds that hold in their portfolio a mix of value and growth stocks, the market capitalization of which are generally lower than $2 billion. Blend funds are also known as “hybrid funds.” Blend funds aim for value appreciation by capital gains. It owes its origin to a graphical representation of a fund’s equity style box.
In addition to diversification, blend funds are great picks for investors looking for a mix of growth and value investment. Meanwhile, small-cap funds are a good choice for investors seeking diversification across different sectors and companies. Investors with a high risk appetite should invest in these funds.
Below we will share with you three buy-rated small-cap blend mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all small-cap blend mutual funds, investors can click here to see the complete list of funds.
Federated MDT Small Cap Core A QASCX invests the majority of its assets in stocks of small-cap companies. QASCX invests mostly in companies listed in the Russell 2000 Index. The fund seeks long-term growth of capital and its investments aren’t restricted to equity securities of domestic issuers. Federated MDT Small Cap Core A has a three-year annualized return of 10.4%.
As of June 2016, QASCX held 178 issues, with 1.66% of its assets invested in Dean Foods Co.
Sentinel Small Company C SSCOX seeks long-term capital appreciation. SSCOX invests the majority of its assets in companies with market capitalization below $4 billion. The fund invests in companies that are believed to have impressive fundamentals including attractive value and sustainable growth prospects. Also, SSCOX may invest in non-US securities that are traded in the U.S. or Canada, or are denominated in U.S. or Canadian dollars. Sentinel Small Company C fund a three-year annualized return of 7%.
Jason Ronovech is the fund manager of SSCOX since 2013.
TIAA-CREF Small-Cap Equity Retire TRSEX invests heavily in domestic small cap companies having market capitalization identical to those included in the Russell 2000 Index. TRSEX primarily invests in small sized companies across different sectors. TIAA-CREF Small-Cap Equity Retire has a three-year annualized return of 7.8%.
TRSEX has an expense ratio of 0.67% compared to a category average of 1.37%.
To view the Zacks Rank and past performance of all small-cap blend mutual funds, investors can click here to see the complete list of funds.
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