Top 5 Growth Mutual Funds (Feb. 2011)

A single minded focus towards capital appreciation are what best characterize growth funds. This purity of style is further established by the fact that investors can expect few or no dividend pay outs from such mutual funds. But investing in this class of funds requires a relatively higher appetite for risk than those following a value or blend style towards investing. However, in depth research and professional management are what make mutual funds a much safer proposition as compared to directly investing in growth stocks.

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.

Reynolds Blue Chip Growth (RBCGX) seeks capital appreciation. It invests the majority of its assets in common stocks of companies with the potential for superior growth. The companies selected must be renowned in their respective sectors and have a minimum market-cap of $1 billion. The growth mutual fund has a three year annualized return of 18.82%

Frederick L. Reynolds is the fund manager and he has managed this growth mutual fund since 1988.

Needham Growth (NEEGX) invests at least 65% of its assets in domestic equity securities. It focuses on sectors such as technology, healthcare, media and business and consumer services. The growth mutual fund returned 31.37% in the last one year period and has a ten year annualized return of 7.26%.

The growth mutual fund has a minimum initial investment of $2,000 and an expense ratio of 2.00% compared to a category average of 1.46%.

Thrivent Mid Cap Growth A (LBMGX) seeks capital appreciation. At least 80% of its assets are invested in mid-cap companies. It focuses on mid-cap stocks similar to companies in the Russell Mid-cap Growth index or S&P MidCap 400/Citigroup Growth index. The growth mutual fund has a five year annualized return of 7.62%

Andrea J. Thomas is the fund manager and he has managed this growth mutual fund since 2003.

Marshall Mid-Cap Growth (MRMSX) invests the majority of its assets in growth stocks of mid-cap companies. It focuses on purchasing common stocks issued by firms with market capitalizations corresponding to those included in the Russel Mid-Cap Growth index. The growth mutual fund returned 31.29% in the last one year period.

As of January 2011, this growth mutual fund held 89 issues, with 4.92% of its total assets invested in Energy XXI (Bermuda) Ltd.

Invesco Van Kampen Mid Cap Growth A (VGRAX) seeks capital growth. It invests heavily in mid-cap growth companies. A large proportion of its assets are utilized to purchase equity securities such as common stocks. The growth mutual fund has a ten year annualized return of 4.3%.

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 1.46%.

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

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