Top 5 Growth Mutual Funds (Jan. 2011)

Growth funds are the clear choice for investors who are willing to forgo current income for capital appreciation. This category of mutual funds concentrates on returning significant capital gains by investing in companies whose value is projected to increase appreciably over time. Investing in these funds also requires a reasonable appetite for risk and a relatively longer investment horizon. However, a conservative approach to fund management helps in reducing the risk factor for investors to a great degree.

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.

Franklin Templeton Growth Allocation A (FGTIX) seeks invests in other mutual funds from Franklin Templeton. The fund invests heavily in equity funds and utilizes a significantly smaller proportion of its assets to invest in bond funds and money market securities. The growth mutual fund has a five year annualized return of 4.21%.

Tony Coffey is the fund manager and he has managed this growth mutual fund since 1996.

JPMorgan Large Cap Growth A (OLGAX) invests at least 80% of its assets ate used to purchase equity securities of large-cap companies. The market capitalizations of these companies must be within the range of the companies in the Russell 1000 Growth index. The growth mutual fund returned 21.4% over the last one year period.

The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.24% compared to a category average of 1.32%.

Value Line Premier Growth (VALSX) seeks capital appreciation over the long term. The fund invests the majority of its assets in a wide range of domestic equity securities issued by companies with the potential for superior growth. It is a no load fund and may also purchase foreign securities.

The growth mutual fund has a five year annualized return of 3.75%.

Berkshire Focus (BFOCX) primarily invests in 20-30 common stocks of companies with the ability to return significant growth over the long term. These firms are expected to outperform the economy as a whole, concentrating on capital growth with little emphasis on income from dividends. The growth mutual fund returned 50.98% over the last one year period.

As of June 2010, this growth mutual fund held 28 issues, with 22.48% of its total assets invested in Apple, Inc.

CGM Focus (CGMFX) seeks long term capital growth. The fund invests in equity securities of twenty to hundred companies at a given point of time. It invests in companies of all sizes, but focuses on acquiring stocks of companies with a minimum market capitalization of $5 billion. The growth mutual fund has a ten year annualized return of 14.89%.

G. Kenneth Heebner is the fund manager and he has managed this growth mutual fund since 1997.

To view the Zacks Rank and past performance of all growth mutual funds, then click here.

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