Small-cap growth funds become a natural choice for investors with a high risk appetite when capital appreciation over the long term takes precedence over dividend payouts. These funds focus on realizing an appreciable amount of capital growth by investing in stocks that are projected to rise in value over the long term.

Meanwhile, small cap funds are good choices for investors seeking diversification across different sectors and companies. Small cap funds generally invest in companies having market cap lower than $2 billion. The companies, smaller in size, offer growth potential and their market capitalization may increase subsequently. Also, due to their less international exposure, small-cap funds offer higher protection than their large- and mid-cap counterparts against any global downturn.

Below we share with you 4 top-rated, small-cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all small-cap growth mutual funds, investors can click here to see the complete list of small-cap growth funds .

PNC Multi Factor Small Cap Growth A (PLWAX - MF report) seeks growth of capital over the long run. PLWAX invests the lion’s share of its assets in securities of small-cap companies. PLWAX generally invests in stocks including common stocks and American Depositary Receipts (ADRs). PLWAX may also consider foreign securities for potential investment. The PNC Multi Factor Small Cap Growth A fund has a year-to-date return of 11%.

PLWAX has an expense ratio of 1.20% as compared to the category average of 1.34%.

T. Rowe Price Diversified Small Cap Growth (PRDSX - MF report) invests a large chunk of its assets in securities of companies with market capitalization similar to those listed in the MSCI US Small Cap Growth Index. PRDSX seeks to maintain a well-diversified portfolio with not more than half of its assets invested in the top 25 holdings. The T. Rowe Price Diversified Small Cap Growth fund has a year-to-date return of 6.5%.

Sudhir Nanda is the fund manager of PRDSX since 2006.

Columbia Small Cap Growth I Z (CMSCX - MF report) invests the major portion of its assets in equity securities of companies having market capitalization within the universe of the S&P SmallCap 600 Index. CMSCX focuses on acquiring common stocks of companies that are believed to have an impressive growth potential over the long run. CMSCX may also invest in companies with short- and medium-term above-average growth potential. The Columbia Small Cap Growth I Z fund has a year-to-date return of 8.8%.

As of September 2015, CMSCX held 127 issues with 2.37% of its assets invested in Euronet Worldwide Inc. (EEFT)

Dreyfus/The Boston Co Small Cap Growth I (SSETX - MF report) invests the majority of its assets in securities of small-cap companies located in the U.S. Companies with market capitalization identical to those included in the Russell 2000 Growth Index are considered as small caps by advisors. SSETX may focus on specific sectors including technology, health care, business services and communications. The Dreyfus/The Boston Co Small Cap Growth I fund has a year-to-date return of 5.5%.

SSETX has an expense ratio of 0.95% as compared to the category average of 1.34%.