Small Business Sentiment Remains Upbeat: 3 Fund Picks – August 16, 2018

Per the latest report from the National Federation of Independent Business (NFIB) on Aug 14, the Small Business Optimism Index increased 0.7 points in July to settle at 107.9. This marked its second-highest level in history, falling short by just 0.1 point of the highest level that the metric had hit in 1983.

Such developments are indicative of burgeoning small businesses across America. This makes it the right time to invest in small-cap mutual funds. Such funds are good choices for investors seeking diversification across different sectors and companies.

NFIB Small-Biz Sentiment at its Highest Level Since 1983

Of the 10 components that were surveyed, eight depicted growth on the back of plans to increase employment, economic expansion and expectations of increasing sales. NFIB President, Juanita Duggan, stated that small business owners in America were leading the economic growth and that expansion remained being the top priority for small businesses in the country. She also stated that such firms depicted “no signs of slowing as they anticipate more sales and better business conditions.”

Further, the report also shed light on the fact that small business owners have been on a hiring spree, with almost 23% of the existing employers planning to create newer jobs. Notably, approximately 37% employers reported that they could not fill in the reported job openings in July.

The firms also benefitted from steadily increasing prices and robust demand. Also, compensation to workers remained strong. Finally, plans to add more inventories instilled further optimism as robust demands kept depleting existing stocks.

3 Best Funds to Buy Now

Given such circumstances, we have highlighted three Japan mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain from such factors. Moreover, these funds have encouraging three and one-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Bridgeway Small-Cap Growth (BRSGX Free Report) maintains a diversified portfolio by investing a large share of its assets in small-cap companies, having impressive growth prospects. BRSGX invests in companies that are listed on the NYSE, NYSE MKT and NASDAQ.

This Sector – Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

BRSGX has an annual expense ratio of 0.94%, which is below the category average of 1.23%. The fund has three and five-year returns of 12.3% and 13%, respectively.

Hartford Small Cap Growth HLS IB (HBSGX Free Report) invests a major portion of its assets in common stocks of small-cap companies. HBSGX looks for companies that are expected to have above-average growth prospects. The fund may also invest a maximum of 25% of its assets in non-U.S. securities.

This Sector – Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

HBSGX has an annual expense ratio of 0.90%, which is below the category average of 1.23%. The fund has three and five-year returns of 10.2% and 11.8%, respectively.

Prudential QMA Small-Cap Value A (TSVAX Free Report) invests a bulk of its assets in equity securities of small-cap companies whose market cap falls within the range of the Standard & Poor’s SmallCap 600 Index or the Russell 2000 Index. The fund may also invest around one-fourth of its assets in real estate investment trusts.

This Sector – Small Cap Growth product has a history of positive total returns for over 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

TSVAX has an annual expense ratio of 1.02%, which is below the category average of 1.25%. The fund has three and five-year returns of 11.4% and 9.9%, respectively.

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