The Zacks Small-Cap Profile features Fidelity Series Small Cap Opportunities Fund, Buffalo Small Cap, Wasatch Small Cap Growth, Pacific Advisors Small Cap A and T. Rowe Price Diversified Small Cap Growth

Today, Zacks Small-Cap Institutional Research (SCIR) features Fidelity Series Small Cap Opportunities Fund (MUTF: FSOPX), Buffalo Small Cap (MUTF: BUFSX), Wasatch Small Cap Growth (MUTF: WAAEX), Pacific Advisors Small Cap A (MUTF: PASMX) and T. Rowe Price Diversified Small Cap Growth (MUTF: PRDSX).

Zacks Small-Cap Profile

Top 5 Small Cap Mutual Funds

For investors who have the willingness to take short term positions and the ability to bear a certain degree of risk, small-cap funds could be the correct choice. These funds generate significant demand driven sales during a market upswing, which lead to an increase in their prices. Smaller firms also look to continuously reinvest their profits back into their business. This reassures shareholders of superior performance and higher profit potential from such companies. Small Cap funds therefore make excellent additions to a well-diversified portfolio.

Below we will share with you 5 top rated small-cap mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all small-cap funds, then click here.

Fidelity Series Small Cap Opportunities Fund (MUTF: FSOPX) seeks capital growth. The majority of the fund’s assets are invested in small-cap companies. It seeks to acquire common stocks, both domestic and foreign, which may be growth or value stocks. This small-cap mutual fund returned 32.41% over the last one year period.

As of July 2010, this small-cap mutual fund held 183 issues, with 2.59% of its total assets invested in Fidelity Revere Str Tr.

Buffalo Small Cap (MUTF: BUFSX) invests heavily in common, preferred stocks and related convertible securities of domestic small-cap companies. Not more than 20% of its assets may be invested in ADRs and foreign securities which are traded on U.S. stock exchanges. This small-cap mutual fund has a five year annualized return of 3.22%.

The small-cap mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.01% compared to a category average of 1.55%.

Wasatch Small Cap Growth (MUTF: WAAEX) seeks capital appreciation with the secondary objective of current income. The fund invests heavily in equity securities of small-cap companies. The fund primarily invests in companies with growth potential with market capitalizations less than $2.5 billion. It is a no-load fund.

This small-cap mutual fund returned 31.02% over the last one year period and has a ten year annualized return of 8.03%.

Pacific Advisors Small Cap A (MUTF: PASMX) invests heavily in stocks of small-cap companies with market capitalizations within $2 billion. A substantial share of its assets is used to purchase stocks issued by companies with market capitalizations below $500 billion. This small-cap mutual fund has a ten year annualized return of 10.88%.

The fund manager is George A. Henning and he has managed this small-cap mutual fund since 1993.

T. Rowe Price Diversified Small Cap Growth (MUTF: PRDSX) seeks long-term capital growth. The majority of the fund’s assets are invested in small companies which are included in the MSCI US Small-Cap Growth Index. The fund’s top 25 holdings do not represent a significant share of total assets. This small-cap mutual fund returned 34.52% over the last one year period.

The small-cap mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.25% compared to a category average of 1.55%.

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

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