Small-cap funds are one of the favorite choices of investors willing to take on a certain amount of risk. Most smaller firms reinvest a large portion of their profits in a systematic manner. This assures shareholders of superior performance and higher profits in times to come. Small cap funds also enjoy significantly high demand when markets are on a roll, which leads to significant increases in their prices. Investors looking for better diversification would do well to consider adding some small cap flavor to their portfolios.

Below we will share with you the 5 best performing small-cap funds year to date. To view the Zacks Rank and past performance of all small-cap funds, then click here. 

Wasatch Emerging Markets Small Cap (WAEMX) seeks capital appreciation over the long term. The fund focuses on investing in smaller companies located in emerging markets. The majority of its assets are utilized to purchase equity securities of companies from emerging markets with market capitalizations of less than $3 billion. The fund returned 51.51% over the last one year period.

The fund manager is Roger Edgley and he has managed this small-cap fund since 2007.

SunAmerica Focused Small-Cap Value A(SSSAX) invests primarily in small-cap companies. The majority of its assets are invested in companies with smaller market capitalizations which are within the range of the Russell 2000 index during the last year. The fund has a ten year annualized return of 5.29%.

As of August 2009, this small-cap fund held 83 issues, with 3.78% of its total assets invested in STEC, Inc.

James Small Cap (JASCX) seeks long-term capital growth. The fund focuses on acquiring common stocks of small-cap companies. These companies must be within the market capitalization range of the Russell 2000 index at the time when the fund purchases their stocks. The fund returned 23.61% over the last one year period.

The small-cap fund has a minimum initial investment of $2,000 and an expense ratio of 1.50% compared to a category average of 1.49%.

Waddell & Reed Small Cap A (UNSAX) invests at least 80% of its assets in domestic and foreign small-cap companies. The fund focuses on acquiring common stocks of companies which are new entrants, particularly those which are entering sectors with the opportunity for appreciable growth. Up to 25% of its assets are invested in foreign companies. The fund has a five year annualized return of 4.18%.

Gilbert Scott is the fund manager has managed this small-cap fund since 2003.

Needham Small Cap Growth (NESGX) seeks long term capital appreciation with lowest possible tax implications. The majority of the fund’s assets is invested in domestic equity securities of companies with market capitalizations of less than $2 billion or is within the range of the Russell 2000 index, if greater. The fund returned 24.09% over the last one year period.

The small-cap fund has a minimum initial investment of $2,000 and an expense ratio of 2.50% compared to a category average of 1.60%.

To view the Zacks Rank and past performance of all small-cap funds, then click here.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.  Learn more about the Zacks Mutual Fund Rank at www.zacks.com/funds/mutualfund/

 
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