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, then click here.
Wells Fargo Advantage Growth (SGROX) seeks long term capital appreciation by investing majority of its assets in US equity securities. Not more than 25% of its assets may be utilised to purchase foreign equity securities. The growth mutual fund returned 15.59% in the last one year period.
The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.31% compared to a category average of 1.29%.
John Hancock 2 Capital Appreciation 1 (JICPX - MF report) invests a minimum of 65% of its assets in equity securities of companies that have a market capitalization of more than $1 billion. The fund selects companies that have favorable growth prospects. It may invest a small portion of its assets in equity securities of foreign companies. The growth mutual fund has a three year annualized return of 18.14%.
Spiros A. Segalas is the fund manager and he has managed this growth mutual fund since 2005.
Value Line Premier Growth (VALSX - MF report) seeks capital growth over long term. The fund invests the majority of its assets in a wide range of domestic companies. The fund is not sector specific and invests in companies regardless of their size. The growth mutual fund returned 10.94% in the last one year period.
As of December 2011, this growth mutual fund held 256 issues, with 1.94% of its total assets invested in Alexion Pharmaceuticals, Inc.
Neuberger Berman Mid Cap Growth (NMANX - MF report) utilizes at least 80% of its assets to purchase equity securities of mid-cap companies. Companies invested in must have market capitalizations within the range of Russell Midcap Index at the time of purchase. The growth mutual fund has a ten year annualized return of 5.5%.
The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.02% compared to a category average of 1.36%.
JPMorgan Large Cap Growth A (OLGAX) seeks long term capital growth. The fund invests heavily in equity securities that have the potential for above average growth. The fund focuses on companies with large market capitalization which are within the market capitalization range of the Russell 1000 Growth Index. The growth mutual fund returned 9.36% in the last one year period.
Christopher Jones is the fund manager and he has managed this growth mutual fund since 2006.
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.