Buy These 3 Small-Cap Value Mutual Funds for a Shining Portfolio

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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, have 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? Meanwhile, small-cap funds are a good choice 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 also expected to provide diversification across different sectors and companies.

Below we share with you three top-ranked, small-cap value mutual funds, namely, Bridgeway Small Cap Value Fund BRSVX, Vericimetry U.S. Small Cap Value Fund VYSVX, and T. Rowe Price Small-Cap Value Fund PRSVX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform peers in the future. Investors can click here to see the complete list of funds.

Bridgeway Small Cap Value Fund seeks long-term capital appreciation by investing most of its net assets along with borrowings if any, in small-cap stocks that are listed on New York Stock Exchange, NYSE American, and Nasdaq in the small-cap value category. BRSVX advisors use statistical methods to make investment decisions.

Bridgeway Small Cap Value Fund has a three-year annualized return of 25.7%. As of the end of  December 2021, BRSVX held 135 issues with 2.02% of its assets invested in Hovnanian Enterprises Inc.

Vericimetry U.S. Small Cap Value Fund seeks long-term capital gains by investing a sizeable portion of its net assets in U.S. small-cap value stocks during the time of purchase. VYSVX fund managers use the full-market capitalization method to determine the small-cap stocks and their proportions.

Vericimetry U.S. Small Cap Value Fund has a three-year annualized return of 15.3%. VYSVX has an expense ratio of 0.63% compared with the category average of 1.16%.

T. Rowe Price Small-Cap Value Fund seeks long-term growth of capital by investing the majority of its net assets along with borrowings if any, in equity securities of companies that have a market capitalization within or below the range of companies listed in the Russell 2000 Index. PRSVX management can also invest in stocks with a high market cap.

T. Rowe Price Small-Cap Value Fund has a three-year annualized return of 13.5%. J. David Wagner is the fund manager of PRSVX since June 2014.

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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