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Mutual Fund Commentary

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.

Frost Growth Equity A (FACEX - MF report) invests the majority of its assets in equity securities. It focuses on those companies which have the potential to earn higher revenues and earnings. It may also invest in domestic and foreign equity securities as well as American Depositary Receipts (ADRs).The growth mutual fund has a one year annualized return of 4.73%.

Alan Tarver is the fund manager and he has managed this growth mutual fund since 1981.

Fidelity Growth Company (FDGRX - MF report) seeks capital growth. It invests a large share of its assets in common stocks of growth-oriented companies. The fund invests in both domestic and foreign securities. It selects those securities for its investment that have significant growth potential. The growth mutual fund has a one year annualized return of 6.74%.

As of February 2013, this growth mutual fund held 327 issues, with 5.10% of its total assets invested in Apple Inc.

Pioneer Select Mid Cap Growth A invests the majority of its assets in mid cap stocks. The companies selected for its investment must have market capitalizations within the range of Russell Midcap Growth Index. The growth mutual fund has a one year annualized return of 5.48%.

The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.16% compared to a category average of 1.36%.

Nicholas (NICSX - MF report) 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 24.25%.

Albert O. Nicholas is the fund manager and he has managed this growth mutual fund since 1969.

Praxis Growth Index A (MGNDX - MF report) invests predominantly in equity securities of domestic companies. It tries to replicate similar performance as that of Standard & Poor’s 500 Growth Index by investing in similar companies that are included in the index. The growth mutual fund has a one year annualized return of 11.04%.

The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.08% 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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