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.
State Farm Growth seeks capital appreciation. It focuses on acquiring securities of companies with market capitalizations of at least $1.5 billion, but may invest in companies of all sizes. The majority of its assets are invested in common stocks and other equity securities. The growth mutual fund has a one year annualized return of 9.56%.
The growth fund has a minimum initial investment of $250 and an expense ratio of 0.12% compared to a category average of 1.12%.
Mairs & Power Growth invests the majority of its assets in a wide range of common stocks. The fund may also purchase foreign securities and convertible debt rated lower than investment grade. The growth mutual fund has a one year annualized return of 21.92%.
As of December 2012, this growth mutual fund held 46 issues, with 5.48% of its total assets invested in Valspar Corporation.
Nicholas seeks capital growth over the long term. The fund invests a large share of its assets in common stocks which have significant growth potential. It concentrates on acquiring securities of domestic companies regardless of their sizes. The growth mutual fund has a one year annualized return of 24.05%.
Albert O. Nicholas is the fund manager and he has managed this growth mutual fund since 1969.
Touchstone Growth Opportunities A invests in securities of growth oriented domestic companies. It focuses on those companies which have recorded substantial growth in the previous 1 to 3 years. It selects those stocks that have favorable growth prospects and are attractively priced. The growth mutual fund is non diversified and has a one year annualized return of 20.99%.
William A. Muggia is the fund manager and he has managed this growth mutual fund since 2006.
Fidelity Series International Growth seeks capital growth. The fund invests heavily in securities issued from emerging markets. Generally, it invests in common stocks. It utilizes the fund’s assets by investing in different emerging countries and also in various sectors. The growth mutual fund has a one year annualized return of 19.49%.
The growth mutual fund has an expense ratio of 1.04% compared to a category average of 1.42%.
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