As an investor, it's always important to keep an eye on the performance of different funds to see which ones are producing the best returns. Small cap funds, which invest in companies with market caps of under $2 billion, have been particularly interesting to watch in recent years. Here are some of the top performing small cap funds of the year:
Vanguard Small-Cap Growth ETF (VBK)
The Vanguard Small-Cap Growth ETF has been one of the top performers in the small cap space this year, with a return of over 20%. This fund tracks the CRSP US Small Cap Growth Index and invests in companies with strong growth potential. The low expense ratio of 0.07% makes it an attractive option for investors looking to minimize costs.
iShares Russell 2000 Growth ETF (IWO)
The iShares Russell 2000 Growth ETF has also been performing well, with a year-to-date return of around 18%. This fund tracks the Russell 2000 Growth Index, which includes small cap companies with potential for above-average earnings growth. With an expense ratio of 0.24%, it's slightly more expensive than the Vanguard Small-Cap Growth ETF, but still a solid option.
T. Rowe Price QM U.S. Small-Cap Growth Equity Fund (PRDSX)
The T. Rowe Price QM U.S. Small-Cap Growth Equity Fund is an actively managed fund that aims to outperform the Russell 2000 Growth Index. It has done just that this year, with a return of over 24%. The fund's focus on high-quality small cap companies with strong growth potential has paid off for investors. The expense ratio of 0.76% is a bit higher than the ETF options, but still in line with other actively managed funds.
DFA US Small Cap Portfolio (DFSTX)
The DFA US Small Cap Portfolio is another solid option for investors interested in small cap funds. This passively managed fund tracks the DFA US Small Cap Index and has a year-to-date return of over 17%. The focus on small cap companies with a history of strong earnings and cash flow growth has helped the fund outperform many of its peers. The expense ratio of 0.52% is higher than some of the ETF options, but still relatively low for an actively managed fund.
Fidelity Small Cap Discovery Fund (FSCRX)
The Fidelity Small Cap Discovery Fund is an actively managed fund that focuses on small cap companies with potential for above-average earnings growth. This year, it has produced a return of over 21%. The expense ratio of 0.89% is a bit higher than some of the other actively managed funds on this list, but still within reason for investors looking for strong returns in the small cap space.
Conclusion
Small cap funds can be a great way to diversify your portfolio and potentially reap strong returns. While these are some of the top performers of the year, it's important to do your own research and due diligence before investing in any fund. Look at factors like expense ratios, historical returns, and the fund's investment strategy to determine if it's the right fit for your investment goals and risk tolerance.