Growth mutual funds are the natural choice for investors who prioritize capital growth over regular dividend income. This category of mutual 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.
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 20.92% 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 1.33%.
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 3.12%.
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 39.17% over the last one year period.
Malcolm R Fobes III is the fund manager has managed this growth mutual fund since 1997.
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 16.53%.
As of June 2010, this growth mutual fund held 18 issues, with 16.42% of its total assets invested in Ford Motor Company.
Westcore MIDCO Growth (WTMGX) primarily invests in stocks of medium-sized companies with significant growth potential. The majority of its assets are invested in mid-cap companies with market capitalizations similar to those included in the Russell Mid-cap Growth index. This growth mutual fund returned 21.86% in the last one year period.
The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.08% against a category average of 1.47%.
To view the Zacks Rank and past performance of all growth mutual funds, then click here.