Choosing the Best Small-Cap Mutual Fund: A Comprehensive Guide

The best mutual fund for small-cap stocks can vary depending on individual financial goals, risk tolerance, and the state of the market. While there is no one-size-fits-all answer, understanding key metrics and ratings can help you make a well-informed decision.

Top Small-Cap Mutual Funds in the USA

Based on various performance metrics and ratings, here are some of the best small-cap mutual funds in the USA:

Ancora Microcap Fund I (ANCIX) - Overall Rating: A, Risk Grade: B-n Huber Small Cap Value Inv (HUSIX) - Overall Rating: A, Risk Grade: B-n LSV Small Cap Value Inv (LVAQX) - Overall Rating: A, Risk Grade: B-n Royce Small-Cap Portfolio Inv (RCPFX) - Overall Rating: A, Risk Grade: B-n Fidelity Low Priced Stock K6 (FLKSX) - Overall Rating: A, Risk Grade: B-n DFA US Small Cap Value I Inst (DFSVX) - Overall Rating: C, Risk Grade: B-n Bridgeway Small Cap Value (BRSVX) - Overall Rating: A, Risk Grade: Cn Hotchkis and Wiley Small Cap Value Z (HWSZX) - Overall Rating: A, Risk Grade: Cn James Advantage Small Cap Value (JASCX) - Overall Rating: A, Risk Grade: B-n Adirondack Small Cap (ADKSX) - Overall Rating: C, Risk Grade: C

Additional Notable Funds

Investing in mutual funds is a complex process, and it is crucial to understand that the past success of a fund is not always a reliable predictor of future outcomes. Here are a couple of additional notable small-cap funds:

Fidelity Small Cap Index (FSSNX) - Expense Ratio: 0.025, 1-Year Trailing Total Return: -1.6% MM Russell 2000 Small Cap Index (I MCJZX) - Expense Ratio: 0.21, 1-Year Trailing Total Return: -2%

Investing in Small Cap Index Funds

Another way to invest in small-cap stocks is through small-cap index funds. These funds provide access to a broad range of small-cap stocks and can be a wise choice for diversification. Consider the following small-cap index funds:

HDFC Nifty Small Cap 250 Index Fund ICICI Pru Nifty Smallcap 250 Index Nippon India Nifty Small Cap 250 Index Fund HDFC SP BSE 500 Index Fund

The HDFC SP BSE 500 Index Fund, for example, includes diversified top 500 companies, representing the whole Indian stock market. This fund has an average 3-year return of 23.3%, with an expense ratio of 1.04% as of September 2023.

Conclusion: Making Wise Investment Decisions

Being a successful investor in small-cap mutual funds requires thorough investigation and a long-term investment plan. It is advisable to work with a financial counselor who can guide you based on your unique situation and financial goals. Diversification and a balanced approach to risk and return are key to building a successful investment portfolio.