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. To view the Zacks Rank and past performance of all growth funds, then click here.
Delaware Pooled Large-Cap Growth Equity (DPLGX) invests heavily in large-cap companies. The fund selects companies which have the ability to grow their earnings significantly over the long term. It primarily purchases equity securities of large-cap companies which are included in the Russell 1000 Growth index. The growth mutual fund returned 11.88% in the last one year period.
The growth mutual fund has an expense ratio of 0.65% compared to a category average of 1.33%.
Baron Growth Retail (BGRFX) seeks long term capital growth. The fund focuses on investing in smaller companies with substantial growth potential. It usually purchases common stocks of companies with market capitalizations not greater than $2.5 billion. The growth mutual fund returned 18.27% in the last one year period and has a ten year annualized return of 6.29%.
Ronald Baron is the fund manager and he has managed this growth mutual fund since 1995.
Thompson Plumb Growth (THPGX) invests at least 65% of its assets in a wide variety of common stocks. These stocks must be issued by companies with capable management; superior growth prospects and low levels of debt. The growth mutual fund returned 11.47% in the last one year period.
As of June 2010, this growth mutual fund held 86 issues, with 3.85% of its total assets invested in ExxonMobil Corporation.
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 13.08%
The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 2.00% compared to a category average of 1.33%.
Fidelity Mid Cap Growth (FSMGX) invests the majority of its assets in mid-cap companies identical to those in the Russell Midcap index or S&P MidCap 400 index. The fund purchases both domestic and foreign securities. It may consider for investment companies with large or small market capitalizations. It is a no load mutual fund
The growth mutual fund returned 23.52% in the last one year period. To view the Zacks Rank and past performance of all growth mutual 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/
