Growth funds are the natural choice for investors who prioritize capital growth over regular dividend income. This category of funds focus on returning capital growth by investing in stocks companies whose value is expected to rise over the long term. A relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities since they experience more fluctuations than other fund classes. However, compared to sector specific investments, like technology funds, the associated risk is much lower.
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.
Fidelity Blue Chip Growth (FBGRX) seeks capital appreciation over the long term. The fund utilizes the majority of its assets to purchase common stocks of blue-chip companies. It focuses on investing in domestic and foreign companies with the potential to deliver above average growth. The growth mutual fund has a three year annualized return of 6.08%
The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.93% compared to a category average of 1.32%.
JPMorgan Large Cap Growth A (OLGAX) invests at least 80% of its assets are used to purchase equity in 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 32.56% over the last one year period.
Christopher Jones is the fund manager and he has managed this growth mutual fund since 2006.
Wells Fargo Advantage Growth (SGROX) seeks long-term capital growth. The fund invests in companies with the ability to grow revenues and earnings significantly. The majority of the fund’s assets are invested in equity securities. The growth mutual fund has a five year annualized return of 7.85%
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 1.32%.
BlackRock Focus Growth A (MDFOX) primarily invests in common stocks of 25 to 35 companies with above-average growth potential. It focuses on acquiring equity securities of mid-cap and large-cap companies. Not more than 20% of its assets are invested in foreign securities. The growth mutual fund returned 33.97% over the last one year period.
As of November 2010, this growth mutual fund held 34 issues, with 7.65% of its total assets invested in BlackRock Liquidity TempFund Instl.
T. Rowe Price New America Growth (PRWAX) seeks capital appreciation over the long term. The fund invests at least 65% of its assets in domestic companies. The fund selects companies, regardless of their size, from sectors which have the highest growth potential. The growth mutual fund has a ten year annualized return of 2.37%
Joseph M. Milano is the fund manager and he has managed this growth mutual fund since 2002.
To view the Zacks Rank and past performance of all growth mutual funds, then click here.