Small-cap funds are good choices for investors seeking diversification across different sectors and companies. Investors with a high-risk appetite should pick these funds. Small-cap funds generally invest in companies with a market cap lower than $2 billion. The companies, though smaller in size, offer growth potential, and their market capitalization may increase subsequently.
Meanwhile, value stocks tend to trade at a price lower than their fundamentals (i.e., earnings, book value, debt-equity). It is common for some investors to consider value funds for income or yield. However, not all value funds consist solely of companies that primarily use their earnings to pay out dividends. Investors interested in choosing value funds for yield should check the mutual fund yield, which is dividend payments divided by the value of the mutual fund’s shares.
Below, we share with you three small-cap value mutual funds, namely, Paradigm Select PFSLX, Invesco Small Cap Value VSCAX and BlackRock Emerging Markets Ex-Chn Inv MXCAX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Paradigm Select fund invests in small- and mid-cap companies with market values of $500 million to $10 billion, targeting capital appreciation.
Paradigm Select fund has a three-year annualized return of 25.8%. As of the end of March 2026, PFSLX held 43 issues, with 12.4% of its net assets invested in Lumentum Holdings Inc.
Invesco Small Cap Value fund invests its net assets (plus any borrowings for investment purposes) in securities of small-capitalization companies and in derivatives and other instruments with similar economic characteristics, focusing on undervalued small-cap equities, primarily common stock.
Invesco Small Cap Value fund has a three-year annualized return of 25.2%. VSCAX has an expense ratio of 1.05%.
BlackRock Emerging Markets Ex-Chn Inv fund invests its assets in equity securities of microcap companies that management considers to be undervalued.
BlackRock Emerging Markets Ex-Chn Inv fund has three-year annualized returns of 24.9%. Egon Vavrek has been the fund manager of MXCAX since April 2025.
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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Small-cap funds are good choices for investors seeking diversification across different sectors and companies. Investors with a high-risk appetite should pick these funds. Small-cap funds generally invest in companies with a market cap lower than $2 billion. The companies, though smaller in size, offer growth potential, and their market capitalization may increase subsequently.
Meanwhile, value stocks tend to trade at a price lower than their fundamentals (i.e., earnings, book value, debt-equity). It is common for some investors to consider value funds for income or yield. However, not all value funds consist solely of companies that primarily use their earnings to pay out dividends. Investors interested in choosing value funds for yield should check the mutual fund yield, which is dividend payments divided by the value of the mutual fund’s shares.
Below, we share with you three small-cap value mutual funds, namely, Paradigm Select (PFSLX), Invesco Small Cap Value (VSCAX) and BlackRock Emerging Markets Ex-Chn Inv (MXCAX). Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.
Paradigm Select fund invests in small- and mid-cap companies with market values of $500 million to $10 billion, targeting capital appreciation.
Paradigm Select fund has a three-year annualized return of 25.8%. As of the end of March 2026, PFSLX held 43 issues, with 12.4% of its net assets invested in Lumentum Holdings Inc.
Invesco Small Cap Value fund invests its net assets (plus any borrowings for investment purposes) in securities of small-capitalization companies and in derivatives and other instruments with similar economic characteristics, focusing on undervalued small-cap equities, primarily common stock.
Invesco Small Cap Value fund has a three-year annualized return of 25.2%. VSCAX has an expense ratio of 1.05%.
BlackRock Emerging Markets Ex-Chn Inv fund invests its assets in equity securities of microcap companies that management considers to be undervalued.
BlackRock Emerging Markets Ex-Chn Inv fund has three-year annualized returns of 24.9%. Egon Vavrek has been the fund manager of MXCAX since April 2025.
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.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
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