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.
Fidelity Growth Discovery (FDSVX - Free Report) seeks capital growth over the long run. It invests in both U.S. and non-U.S. companies that are believed to have above-average growth prospect. The fund considers factors such as financial strength, and market and economic condition for investment decisions. The growth mutual fund has returned 24.95% in the last one year.
The fund has an expense ratio of 0.87% as compared to category average of 1.21%.
Putnam Growth Opportunities A (POGAX - Free Report) primarily invests in common stocks of domestic companies having growth potential. Factors such as valuation, expected future earnings and cash flows are taken into consideration for investment decisions. The growth mutual fund has returned 24.58% in the last one year.
Robert Brookby is the fund manager and has managed this fund since 2009.
Touchstone Growth Opportunities A (TGVFX - Free Report) seeks long-term capital appreciation. It generally invests in U.S. companies which are believed to have high earnings growth potential over a span of 1 to 3 years. It invests in companies that have performed consistently in terms of earnings growth and are expected to do so in future. This non-diversified growth mutual fund returned 23.47% in the last one year.
As of March 2014, this fund held 64 issues with 4.57% of its assets invested in Apple Inc.
American Century Disciplined Growth Investor (ADSIX - Free Report) invests in growth stocks of large cap domestic companies. It invests in companies with market capitalization of more than $2 billion. It focuses on those stocks that are believed to optimally balance risk and expected return. This non-diversified growth mutual fund returned 21.11% in the last one year.
The fund has an expense ratio of 1.03% as compared to category average of 1.21%.
Federated MDT Mid Cap Growth Strategies (FGSAX - Free Report) seeks capital growth. It invests majority of its assets in mid-cap firms having impressive growth potentials. The market capitalizations of these companies are within the range of market cap of companies included in the Russell Midcap Growth Index. The growth mutual fund returned 25.84% in the last one year.
As of March 2014, this fund held 152 issues with 2.27% of its assets invested in United Continental Holdings 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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