Today we are featuring top-performing “Small-Cap” equity mutual funds, which primarily invest in equity securities of companies that have market capitalizations of less than $2 billion.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Small-Cap Equity Funds.

3 Solid Choices

Buffalo Small Cap (BUFSX) seeks long-term growth of capital. The fund targets companies with individual market capitalizations of $2 billion or less at the time of initial purchase.

The fund primarily invests in common stocks, preferred stocks, convertible preferred stocks warrants and rights of domestic small-cap companies. As of March 2009, its portfolio turnover was 15%.

Kent Gasaway has been lead manager at the fund since its inception in April 1998. Previously, Gasaway spent 10 years with Waddell & Reed Mutual Funds Group.

Dean Small Cap Value A (DASCX) seeks long-term capital appreciation and secondarily, dividend income. The fund focuses on high-quality companies that are undervalued for transitory reasons in search of above-average returns.

The fund may invest in equity securities of mid or large-cap companies, preferred stocks, or derivative instruments, such as put and call options and futures contracts, and in fixed-income securities, including corporate bonds.

Unit holders have to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank (“Strong Buy”) fund. It has an expense ratio of 1.50%.

Delaware Pooled Small-Cap Growth Equity (DPSGX) was incepted in September 1998. The investment seeks long-term capital appreciation.

The fund adopts an intensive, bottom-up analysis to uncover rapidly growing companies that offer new services or technologies or are entering new product cycles. It may invest up to 20% of assets in debt securities of corporate and government issuers.

Sepracor Inc. (SEPR), Medarex Inc. (MEDX) and Charles River Laboratories International Corp. (CRL) are among the fund’s top holdings.

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

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.


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