The Dow and the S&P 500 registered positive returns of 7.10% and 3.74% from Oct 25, 2022 to Nov 22, 2022. The stocks market registered gains after inflation in the United States showed signs of cooling in October, raising hopes that the Federal Reserve may now be less aggressive with its monetary policy. The consumer price index (CPI) registered a 7.7% increase year over year in October, following record highs of 8.2% in September and 8.3% in August.

The producer price index (PPI), which measures wholesale inflation, recorded an 8% year-over-year increase in demand for finished goods in October versus an 8.4% increase in September. Although the Federal Reserves’ inflation target of 2% is far from met, investors are expecting the central bank to be less hawkish and, in the process, reduce the borrowing cost. Needless to say, investors are concerned over rising interest rates that could cripple the economy and push it toward a recession and impact stock market returns.

Additionally, ahead of the holiday season, especially during the Thanksgiving week, the stock market has historically performed well. Thus, investors who prefer capital appreciation over dividend pay-outs may consider investing in growth mutual funds having exposure of large, mid and small-cap stocks that are projected to rise in value over the long term.

Moreover, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

By the way, these funds boast a Zacks Mutual Fund Rank #1 (Strong Buy), positive three-year and five-year annualized returns, and minimum initial investments within $5000.

Baron Focused Growth Fund Retail (BFGFX Quick QuoteBFGFX - Free Report) invests most of its net assets for the long term in common stocks of U.S. small- and mid-sized growth companies with market capitalization similar to that of the highest market-cap company listed on the Russell Midcap Growth Index at the time of purchase. BFGFX advisors choose to invest in securities that have appreciated beyond their original market-cap ranges.

Ronald Baron has been the lead manager of BFGFX since Jun 30, 2008. Most of the fund’s exposure is in sectors such as retail trade (23.45%), non-durable (20.67%) and technology (13.60%) as of 10/31/2022.

BFGFX’s three-year and five-year annualized returns are nearly 32.6% and 23.3% respectively. BFGFX has a Zacks Mutual Fund Rank #1 (Strong Buy) and an annual expense ratio of 1.32%.

To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

Oberweis Micro Cap Portfolio (OBMCX Quick QuoteOBMCX - Free Report) invests most of its net assets in the securities of very small companies with a market capitalization of less than or equal to $600 million or within the range of companies listed on the Russell Micro-Cap Growth Index, whichever is greater. OBMCX advisors choose to invest in companies that the fund's investment adviser believes have the potential for significant long-term growth in market value.

James W. Oberweis has been the lead manager of OBMCX since Nov 4, 2001, and most of the fund’s exposure is in sectors such as technology (30.58%), industrial cyclical (13.07%) and services (12.11%) as of 10/31/2022.

OBMCX’s three-year and five-year annualized returns are 24.4% and 14.8%, respectively. OBMCX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.50%.

Needham Aggressive Growth Fund (NEAGX Quick QuoteNEAGX - Free Report) invests in long-term, tax-efficient capital appreciation by investing most of its net assets in equity securities of domestic issuers listed on a nationally recognized securities exchange. NEAGX chooses to invest in companies with strong growth potential and positive financial returns.

John O. Barr has been the lead manager of NEAGX since Jan 1, 2010, and most of the fund’s exposure is in sectors such as technology (44.70%), industrial cyclical (19.93%) and retail trade (6.21%) as of 10/31/2022.

NEAGX’s three-year and five-year annualized returns are 17.8% and 12.0%, respectively. NEAGX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.72.

Paradigm Micro-Cap Fund (PVIVX Quick QuotePVIVX - Free Report) invests most of its net assets in common stocks of U.S. micro-cap companies with market capitalization within the range of the companies listed on the Russell Microcap Index at the time of purchase. PVIVX advisors choose to invest heavily in certain sectors based on advisor experience or newly-acquired investment opportunities with higher expected returns.

Candace King Weir has been the lead manager of PVIVX since Dec 27, 2011, and most of the fund’s exposure is in sectors such as technology (36.07%), retail trade (18.87%) and industrial cyclical (12.5%) as of 10/31/2022.

PVIVX’s three-year and five-year annualized returns are 17.6% and 9.6%, respectively. PVIVX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 1.25%.

J P Morgan Large Cap Growth Fund (JLGRX Quick QuoteJLGRX - Free Report) invests most of its assets, along with borrowings, if any, in the equity securities of large, well-established companies. JLGRX advisors choose large companies with market capitalization within the range of the companies listed on the Russell 1000 Growth Index at the time of purchase.

Giri K Devulapally has been the lead manager of JLGRX since Aug 2, 2004, and most of the fund’s exposure is in sectors such as technology (38.53%), retail trade (18.64%) and health (7.9%) as of 10/31/2022.

JLGRX’s three-year and five-year annualized returns are 15.7% and 15.4%, respectively. PVIVX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.54%.

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