When capital appreciation over the long term takes precedence over dividend payouts, growth funds become a natural choice for investors. 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 to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes.
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, investors can click here to see the complete list of funds.
ClearBridge Aggressive Growth A seeks growth of capital. It invests in growth companies that may or are already witnessing earnings growth higher than that of firms in the S&P 500 Index. It invests in prominent and big companies whose earnings are expected to accelerate in the long run. The growth mutual fund returned 37.36% in the last one year.
The fund has an expense ratio of 1.23% as compared to category average of 1.22%.
Putnam Multi-Cap Growth A focuses on investing in growth stocks. The fund invests in domestic companies irrespective of the size. Earnings of these companies are expected to outpace earnings of their peers and thereafter boost the share prices. The growth mutual fund returned 30.83% in the last one year.
Robert Brookby is the fund manager and has managed this fund since 2010.
Permanent Portfolio Aggressive Growth aims for higher growth in share valuation than the overall growth in stock market. It invests in domestic stock and stock warrants with the ability to return higher profit that the broader market. These shares are primarily valued for their growth potential of revenues, earnings and dividends among others. The growth mutual fund returned 30.11% in the last one year.
As of February 2014, this fund held 41 issues with 6.58% of its assets invested in Facebook Inc.
MFS Growth A invests in equity securities of growth companies. These companies are likely to witness higher earnings growth than other companies. The fund invests in companies of all sizes and investments are not restricted to domestic companies. The growth mutual fund returned 28.22% in the last one year.
The fund has an expense ratio of 1.04% as compared to category average of 1.22%.
Thrivent Large Cap Growth A seeks capital growth over the long term. A lion’s share of its assets goes into large-cap companies with market capitalization same as that of S&P 500/ Citigroup Growth Index, the Russell 1000 Growth Index or large-cap companies classified by Lipper, Inc. The growth mutual fund returned 28.87% in the last one year.
As of December 2013, this fund held 45 issues with 8.18% of its assets invested in Apple Inc.
To view the Zacks Rank and past performance of all growth mutual funds, investors can click here to see the complete list of funds.
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.
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