Growth funds are the preferred option when capital growth over the long term takes precedence over dividend payouts. These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance for risk and the willingness to park funds for the longer term are necessary when investing in these securities since they may experience more fluctuations than other fund classes..
Below we will share with you 5 top rated growth funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all growth funds, then click here.
Fidelity Mid Cap Growth (FSMGX) seeks capital appreciation over the long term. At least 80% of its assets are invested in mid-cap companies identical to those in the Russell Midcap index or S&P MidCap 400 index. It is a no load fund and invests in both domestic and foreign securities.
The growth fund returned 47.38% in the last one year period.
Yacktman Focused (YAFFX) invests heavily in companies with market capitalizations of $1 billion or more, having long track records of growth and dividends. This is a concentrated fund that usually holds less than 25 stocks.The fund has a three year annualized return of 7.47%.
This growth fund has a minimum initial investment of $2,500 and an expense ratio of 1.25% compared to a category average of 1.28%.
Lifetime Achievement (LFTAX) seeks to grow its investments over the long term through capital appreciation. It is a fund of funds which invests in shares of other investment companies. It focuses on investing in funds which seek capital appreciation over the long term. The fund has a five year annualized return of 10.94%.
Roland R Manarin is the fund manager and has managed this growth fund since 2000.
Van Kampen Equity Growth A (VEGAX) invests in growth-oriented securities of medium and large-cap companies. These would include stocks, convertibles and other securities which have equity-like features. The growth fund returned in 69.91% in the last one year period and has a five year annualized return of 5.03%.
As of December 2009, this growth fund held 33 issues, with 6.70% of its total assets invested in Amazon.com, Inc.
Fairholme Fund (FAIRX) seeks capital appreciation by investing in a focused portfolio of fixed income and equity securities. The fund invests in a variety of securities including domestic and foreign corporate debt, government securities and foreign money market instruments. The fund has a ten year annualized return of 13.91%.
This growth fund has a minimum initial investment of $10,000 and an expense ratio of 1.02% compared to a category average of 1.10%.
To view the Zacks Rank and past performance of all growth funds, then click here.
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/mutualfund/