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Investors who are willing to bet on highly risky instruments could find aggressive growth funds extremely profitable against regular growth funds, owing to the ability of the former to generate above-average market returns.
The current economic climate also makes it ideal to venture into aggressive growth funds as developments in many macroeconomic affairs are influencing equity markets in a positive manner.
A fresh round of U.S.-China trade talks scheduled later this week and Fed’s dovish stance on further rate hikes not only drove equity markets higher but also boosted investor optimism. This helped put aside fears of a global economic slowdown and an imminent recession.
Major Tailwinds Pushing Markets Higher
Later this week, Washington and Beijing are set to discuss key issues that could possibly bring an end to the ongoing trade war. Matters such as China’s systematic theft of American intellectual property and trade secrets over the years, and the steadily growing U.S. trade deficit with China demand solutions that could involve fundamental changes in Chinese policies.
China’s effective prioritization of domestic companies over American businesses also prevents the latter from fair competition in the former market. Trade talks are aimed at resolving these issues, which could effectively put an end to the trade war. Investor optimism is high over a favorable deal this time.
In addition, Federal Reserve is likely to hold off any further rate hikes until its June 2019 meeting, a Forbes report cited. Per the CME FedWatch Tool, which reports the latest probabilities of a rate change by the Federal Open Market Committee (FOMC), cites a probability of 98.9% against 1.1% for a rate hike in the range of 2.5% to 2.75% in the FOMC’s Jan 29-30 meeting.
The Fed’s wait-and-see approach is also boosting investor confidence, which is reflecting in U.S. equity market movements in recent times.
Why Invest in Aggressive Growth Mutual Funds?
Aggressive growth funds primarily invest in common stocks of companies with high potential for growth and profit. These funds invest the majority of their assets in businesses that can generate better returns than standard growth funds. This makes mid- and small-cap companies ideal for the fund’s investments as they offer prospects of aggressive growth.
Although these investments are highly volatile, these could be ideal options in the present economic scenario. Given the encouraging macroeconomic factors influencing the economy, aggressive growth funds could be precise investment choices to add to your portfolio now.
4 Aggressive Growth Mutual Funds to Buy
We have selected some aggressive growth mutual funds that could be good investment options at present. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
T. Rowe Price New Horizons (PRNHX - Free Report) seeks long-term capital appreciation by investing in a diversified group of emerging businesses. These businesses usually have a high probability of accelerating earnings growth that depend on factors such as reformed management, new products and services or structural changes in the economy.
This Zacks sector – Small Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PRNHX has an annual expense ratio of 0.78%, which is below the category average of 1.20%. The fund has one and three-year returns of 4% and 13.8%, respectively.
Lord Abbett Developing Growth R6 (LADVX - Free Report) seeks long-term capital growth by investing in a diversified set of small-cap companies that have high possibility of growth. The fund invests about 65% of its net assets in securities of emerging companies and may invest up to 10% of its assets in non-U.S. companies as well.
This Zacks sector – Small Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
LADVX has an annual expense ratio of 0.59%, which is below the category average of 1.22%. The fund has one and three-year returns of 5.4% and 10.3%, respectively.
Morgan Stanley Inst Mid Cap Growth A (MACGX - Free Report) seeks long-term capital growth by investing 80% of its assets in securities of mid-cap companies. The fund invests in emerging and established businesses that have capitalizations within the range of organizations included on the Russell Midcap Growth Index.
This Zacks sector – Mid Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MACGX has an annual expense ratio of 1.01%, which is below the category average of 1.20%. The fund has one and three-year returns of 11.8% and 10.3%, respectively.
Merger Investor (MERFX - Free Report) aims capital appreciation by participating in merger arbitrage. The fund invests about 80% of its assets in securities of companies that are involved in mergers, takeovers, leveraged buyouts etc.
This Zacks sector – Mid Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MERFX has an annual expense ratio of 1.80%, which is below the category average of 2.15%. The fund has one and three-year returns of 7.7% and 4.2%, respectively.
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4 Aggressive Growth Mutual Funds to Buy in 2019
Investors who are willing to bet on highly risky instruments could find aggressive growth funds extremely profitable against regular growth funds, owing to the ability of the former to generate above-average market returns.
The current economic climate also makes it ideal to venture into aggressive growth funds as developments in many macroeconomic affairs are influencing equity markets in a positive manner.
A fresh round of U.S.-China trade talks scheduled later this week and Fed’s dovish stance on further rate hikes not only drove equity markets higher but also boosted investor optimism. This helped put aside fears of a global economic slowdown and an imminent recession.
Major Tailwinds Pushing Markets Higher
Later this week, Washington and Beijing are set to discuss key issues that could possibly bring an end to the ongoing trade war. Matters such as China’s systematic theft of American intellectual property and trade secrets over the years, and the steadily growing U.S. trade deficit with China demand solutions that could involve fundamental changes in Chinese policies.
China’s effective prioritization of domestic companies over American businesses also prevents the latter from fair competition in the former market. Trade talks are aimed at resolving these issues, which could effectively put an end to the trade war. Investor optimism is high over a favorable deal this time.
In addition, Federal Reserve is likely to hold off any further rate hikes until its June 2019 meeting, a Forbes report cited. Per the CME FedWatch Tool, which reports the latest probabilities of a rate change by the Federal Open Market Committee (FOMC), cites a probability of 98.9% against 1.1% for a rate hike in the range of 2.5% to 2.75% in the FOMC’s Jan 29-30 meeting.
The Fed’s wait-and-see approach is also boosting investor confidence, which is reflecting in U.S. equity market movements in recent times.
Why Invest in Aggressive Growth Mutual Funds?
Aggressive growth funds primarily invest in common stocks of companies with high potential for growth and profit. These funds invest the majority of their assets in businesses that can generate better returns than standard growth funds. This makes mid- and small-cap companies ideal for the fund’s investments as they offer prospects of aggressive growth.
Although these investments are highly volatile, these could be ideal options in the present economic scenario. Given the encouraging macroeconomic factors influencing the economy, aggressive growth funds could be precise investment choices to add to your portfolio now.
4 Aggressive Growth Mutual Funds to Buy
We have selected some aggressive growth mutual funds that could be good investment options at present. These funds carry a Zacks Mutual Fund Rank #1 (Strong Buy). Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
T. Rowe Price New Horizons (PRNHX - Free Report) seeks long-term capital appreciation by investing in a diversified group of emerging businesses. These businesses usually have a high probability of accelerating earnings growth that depend on factors such as reformed management, new products and services or structural changes in the economy.
This Zacks sector – Small Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PRNHX has an annual expense ratio of 0.78%, which is below the category average of 1.20%. The fund has one and three-year returns of 4% and 13.8%, respectively.
Lord Abbett Developing Growth R6 (LADVX - Free Report) seeks long-term capital growth by investing in a diversified set of small-cap companies that have high possibility of growth. The fund invests about 65% of its net assets in securities of emerging companies and may invest up to 10% of its assets in non-U.S. companies as well.
This Zacks sector – Small Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
LADVX has an annual expense ratio of 0.59%, which is below the category average of 1.22%. The fund has one and three-year returns of 5.4% and 10.3%, respectively.
Morgan Stanley Inst Mid Cap Growth A (MACGX - Free Report) seeks long-term capital growth by investing 80% of its assets in securities of mid-cap companies. The fund invests in emerging and established businesses that have capitalizations within the range of organizations included on the Russell Midcap Growth Index.
This Zacks sector – Mid Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MACGX has an annual expense ratio of 1.01%, which is below the category average of 1.20%. The fund has one and three-year returns of 11.8% and 10.3%, respectively.
Merger Investor (MERFX - Free Report) aims capital appreciation by participating in merger arbitrage. The fund invests about 80% of its assets in securities of companies that are involved in mergers, takeovers, leveraged buyouts etc.
This Zacks sector – Mid Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
MERFX has an annual expense ratio of 1.80%, which is below the category average of 2.15%. The fund has one and three-year returns of 7.7% and 4.2%, respectively.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>