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 Small-cap value mutual funds provide excellent choices for investors looking for bargains, i.e., stocks at a discount with impressive growth potential. Value mutual funds comprise stocks trading at a discount to book value, low price-to-earnings ratios, and high dividend yields.Value investing is a very popular strategy and for a good reason. After all, who doesn’t want to find stocks with low PEs, solid outlooks, and decent dividends? Added to that, small-cap funds are good choices for investors with a high-risk appetite, as companies with small market capitalizations are expected to have higher growth potential than large- and mid-cap companies. Small-cap funds generally invest in companies having a market cap lower than $2 billion. Also, small-cap funds are expected to provide diversification across different sectors and companies.Below, we share with you three top-ranked small-cap value mutual funds, namely, Bridgeway Omni Small-Cap Value (BOSVX – Free Report), DFA US Targeted Value (DFFVX – Free Report), and Invesco Small Cap Value (VSCAX – Free Report). Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Bridgeway Omni Small-Cap Value seeks a long-term total return on capital. BOSVX invests the majority of its net assets in stocks listed on the New York Stock Exchange, NYSE American and Nasdaq in the small-cap value category.Bridgeway Omni Small-Cap Value has a three-year annualized return of 5.5%. As of June 2024, BOSVX held 563 issues, with 1.2% of its assets invested in SkyWest.DFA US Targeted Value invests in a varied group of readily marketable securities of U.S. small and mid-cap companies that its advisors consider to be value stocks with high profitability.DFA US Targeted Value has a three-year annualized return of 7.6%. DFFVX has an expense ratio of 0.30% compared with the category average of 1.16%.Invesco Small Cap Value seeks long-term capital growth by investing the majority of its net assets in the under-valued securities of small-cap companies. VSCAX invests primarily in common stock.Invesco Small Cap Value has a three-year annualized return of 15.7%. Jonathan Mueller has been one of the fund managers of VSCAX since June 2010.More By This Author:3 First Eagle Mutual Funds Worth Considering For Your Portfolio Don’t Overlook These Chinese Leisure & Recreation Stocks: ATAT, TCOMIt’s Time To Look At 3 High-Yield Large-Cap Energy Stocks