When capital appreciation over the long term takes precedence over dividend payouts, growth funds become a natural choice for investors. These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes
Below we will share with you 5 top rated growth mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.
Wells Fargo Advantage Growth (SGROX) seeks long-term capital growth. The fund invests in companies with the ability to grow revenues and earnings significantly over time. The majority of the fund’s assets are invested in equity securities. The growth mutual fund returned 29.91% in the last one year period.
The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.40% compared to a category average of 1.33%.
Goldman Sachs Growth Opportunities A (GGOAX) invests at least 90% of its assets in equity securities. The fund focuses on acquiring mid-cap stocks and looks at purchasing publicly traded domestic securities. The growth mutual fund has a ten year annualized return of 4.8%.
David M. Shell is the fund manager and he has managed this growth mutual fund since 1999.
GAMCO Growth AAA (GABGX) seeks capital appreciation over the long term. The fund holds a wide range of market traded common stocks and convertible securities. It seeks out securities which are underpriced and have good earnings potential. It is a no load fund.
The growth mutual fund returned 10.24% in the last one year period.
Westcore MIDCO Growth (WTMGX) invests the majority of its assets in mid-sized companies which are included in the Russell Midcap Growth Index. The fund only purchases domestic tradable securities as well as depository receipts. It selects companies for investment based on their growth potential. The growth mutual fund has a five year annualized return of 5.14 %.
As of October 2010, this growth mutual fund held 64 issues, with 2.62% of its total assets invested in Varian Medical Systems, Inc.
Thompson Plumb Growth (THPGX) seeks capital growth over the long term. It invests at least 65% of its assets in a wide variety of common stocks. These stocks must be issued by companies with capable management; superior growth prospects and low levels of debt. The growth mutual fund returned 11.41% in the last one year period.
The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.54% compared to a category average of 1.13%.
To view the Zacks Rank and past performance of all growth mutual funds, then click here.