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 check the mutual fund yield, which is dividend payments divided by the value of the mutual fund’s shares.
Invesco Small Cap Value fund seeks capital appreciation. VSCAX invests in a diversified portfolio of equity securities of small-capitalization companies that the fund’s investment adviser believes are undervalued.
Invesco Small Cap Value has a three-year annualized return of 25.6%. As of the end of October 2025, VSCAX held 103 issues, with 4% of its net assets invested in Coherent Corp.
Heartland Value Investor fund seeks long-term capital appreciation. HRTVX invests primarily in stocks of small companies with market capitalizations of less than $1.5 billion, selected on a value basis.
Heartland Value Investor fund has a three-year annualized return of 18%. HRTVX has an expense ratio of 1.1%.
PGIM Quant Solutions Small-Cap Val fund seeks above–average capital appreciation. TSVAX invests at least 80% of its assets in common stocks of companies with a total market capitalization of less than $2.5 billion.
PGIM Quant Solutions Small-Cap Val has a three-year annualized return of 14.8%. Stephen Courtney has been the fund manager of TSVAX since January 2015.
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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