Investors who choose capital growth over current income would do well to consider growth funds. This category of funds attempts to ensure maximum possible capital gains by investing in companies whose value is expected to increase significantly in the future. Tolerance for a reasonable amount of risk and a long-term approach to investing is required to realize the full potential of these funds. However, the risk involved is much lower when compared to sectoral funds and may be reduced further by funds with a conservative approach.
| Mutual Fund | Zacks Rank | Total Return YTD |
| Wells Fargo Advantage Growth | #1 Strong Buy | 11.4% |
| GMO US Growth III | #1 Strong Buy | 10.9% |
| Delaware Pooled Select 20 | #1 Strong Buy | 10.0% |
| GMO Quality III | #1 Strong Buy | 9.4% |
| Sequoia | #1 Strong Buy | 8.6% |
Below we will share with you the 5 best performing growth mutual funds year to date. To view the Zacks Rank and past performance of all growth funds, then click here.
Wells Fargo Advantage Growth (SGROX) invests in companies with the ability to grow revenues and earnings significantly. The majority of the fund’s assets are invested in equity securities. Not more than 25% of its assets may be used to purchase foreign securities. The growth mutual fund returned 21.15% over the last one year period.
Thomas Ognar is the fund manager has managed this growth mutual fund since 2002.
GMO US Growth III (GMGWX) seeks capital appreciation over the long term. The fund primarily invests in equity securities which are expected to provide returns exceeding that of the Russell 1000 Growth Index. The fund may utilize underlying funds and derivatives to invest in such equity securities. It allocates a large portion of its assets to investments with economic linkages to the U.S. The growth mutual fund has a three year annualized return of 14.97%.
The growth mutual fund has an expense ratio of 0.46% compared to a category average of 1.31%.
Delaware Pooled Select 20 (DPCEX) focuses on acquiring common stocks of firms with the ability to deliver superior growth at a pace exceeding that of the U.S. economy. The fund holds a portfolio of 15 to 25 equity securities. The growth mutual fund returned 15.23% over the last one year period.
Jeffrey S. Van Harte is the fund manager has managed this growth mutual fund since 2005.
GMO Quality III (GQETX) seeks total return. The fund primarily invests in equity securities which are of high quality. Not more than 20% of its assets are held as cash or invested in debt securities of high quality. The growth mutual fund has a five year annualized return of 2.46%.
As of August 2011, this growth mutual fund held 85 issues, with 5.78% of its total assets invested in Microsoft Corporation.
Sequoia (SEQUX) primarily invests in common stocks of companies which have superior growth potential and are attractively priced at the time of purchase. It focuses on investing in domestic companies but may also purchase foreign securities. The growth mutual fund has a ten year annualized return of 5.9%.
The growth mutual fund has a minimum initial investment of $5,000 and an expense ratio of 1.00% compared to a category average of 1.14%.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
