3 Top-Ranked Small-Cap Value Mutual Funds to Buy for Higher Returns

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 dividends. Investors interested in choosing value funds for yield should make sure to check the mutual fund yield. The mutual fund yield 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, Brandes Small Cap Value Fund BSCAX, Nuveen Small Cap Value Opportunities Fund NSCAX and Goldman Sachs Small Cap Value Insights GSATX. 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.

Brandes Small Cap Value Fund invests most of its net assets in equity securities of domestic small-cap companies that are publicly traded. BSCAX advisors invest in common and preferred stocks, warrants and rights issues.

Brandes Small Cap Value Fund has a three-year annualized return of 26.2%. As of the end of June 2025, BSCAX held 45 issues, with 5.9% of its net assets invested in Graham.

Nuveen Small Cap Value Opportunities Fund invests most of its assets, along with borrowings, if any, in equity securities of companies with market capitalization similar to the companies listed on the Russell 2000 Value Index or the Standard & Poor's SmallCap 600 Index at the time of purchase. NSCAX advisors can also invest a small portion of its assets in foreign issues including from emerging market countries.

Nuveen Small Cap Value Opportunities Fund has a three-year annualized return of 18.6%. NSCAX has an expense ratio of 1.2%.

Goldman Sachs Small Cap Value Insights fund invests most of its assets, along with borrowings, if any, ina broadly diversified portfolioof small-cap companies. GSATX advisors also invest in foreign issuers traded in the United States.

Goldman Sachs Small Cap Value Insights fund has a three-year annualized return of 15.5%. Joseph Kogan has been the fund manager of GSATX since February 2024.

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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This article originally published on Zacks Investment Research (zacks.com).

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