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Mutual Fund Commentary

A single minded focus towards capital appreciation is what best characterizes growth funds. This purity of style is further established by the fact that investors can expect few or no dividend pay outs from such mutual funds. But investing in this class of funds requires a relatively higher appetite for risk than those following a value or blend style towards investing. However, in depth research and professional management are what make mutual funds a much safer proposition as compared to directly investing in growth stocks.

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.

USAA Growth (USAAX - MF report) seeks capital growth over the long term by investing a large share of its assets in equity securities of companies having an above par potential for growth. It may invest up to one-fifth of its total assets in foreign stocks. The growth mutual fund has a one year annualized return of 17.80%.

Aziz V. Hamzaogullari is the fund manager and he has managed this growth mutual fund since 2010.

Mairs & Power Growth (MPGFX - MF report) 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 22.15%.

As of December 2012, this growth mutual fund held 46 issues, with 5.48% of its total assets invested in Valspar Corporation.

Thornburg Core Growth A (THCGX - MF report) seeks capital appreciation over the long term. The fund invests a large share of its assets in equity shares of companies which possess the ability to grow at an incremental pace. The fund may also purchase foreign equity securities as well as debt instruments. The growth mutual fund has a one year annualized return of 19.44%.

The growth mutual fund has a minimum initial investment of $5,000 and an expense ratio of 1.48% compared to a category average of 1.26%.

Sentinel Capital Growth A (BRGRX - MF report) invests heavily in common stocks of companies which exhibit growth characteristics. A maximum of one-fourth of its assets may be invested in a particular industry. The growth mutual fund has a one year annualized return of 6.00%.

Elizabeth R. Bramwell is the fund manager and he has managed this growth mutual fund since 1994.

Franklin Flex Cap Growth A (FKCGX - MF report) seeks capital growth by primarily investing in common stocks of companies having a significant growth potential. It may invest in companies regardless of their market capitalization The growth mutual fund has a one year annualized return of 7.36%.

The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.98% compared to a category average of 1.26%.

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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