Growth Stock Mutual Funds

There are hundreds of mutual funds available in the market with the so called Growth Opportunities. However, only a few of them are really into Growth Stocks. Looking at the recent past performance of the mutual funds in the Growth Stocks sector, the picture becomes clear. In this article, let’s discuss about which are the Best Performing Growth Stock Mutual Funds, how to invest in the Growth Stock Mutual Funds and what are the risk factors of Growth Stock Mutual Funds. We will be quoting examples of certain good performing Growth Stock Mutual Funds, but the reference to them is made based upon the past performance.

What is meant by Growth Stock Mutual Funds?
The Growth Stock Mutual Funds are those funds which specifically target stocks of the companies which are in the Growth phase. As we all may be aware that every industry and company has a cycle of growth. The Growth Stocks are classified as those stocks which are expected to appreciate in value over a period of time, where the returns are expected to be better than the remaining market. Wikipedia has the following definition for a growth stock:
  Growth Stocks in finance are stocks that appreciate in value and yield a high return on equity (ROE). Analysts compute ROE by taking the company's net income and dividing it by the company's equity. To be classified as a growth stock, analysts expect to see at least 15 percent return on equity.

How should one look for investing in the Growth Stock Mutual Funds?
Growth Stock Mutual Funds are not a one straight shot investment through which investors can look for getting sure shot returns in the minimum possible time. As the name suggest, Growth Stocks require time to grow and hence the Growth Stock Mutual Funds also need a bit of time to grow in value.

How are Growth Stock Mutual Funds classified?
Going by the market terminology, on a broad basis the Growth Stock Mutual Funds can be classified as follows:
• Large Cap Growth Stock Mutual Funds
• Mid cap Growth Stock Mutual Funds
• Small Cap Growth Stock Mutual Funds

Which are the best performing Growth Stock Mutual Funds in the large cap segment?
As per the finance data available on various sites on internet, there are many funds which have given better returns in the Large Cap Growth Stock Mutual Funds. Below we discuss a few of them (Data as of July 28, 2008):

Top Performers in last 1 year in Large Cap Growth Stock Mutual Funds:

 CGM Mutual LOMMX: The CGM Mutual Fund investment attempts gain long-term capital appreciation with a prudent approach to protection of capital from undue risks. The fund normally invests approximately 75% of assets in equity securities. It may invest up to 35% of assets in debt or fixed-income securities of a quality below investment grade, including securities commonly referred to as "junk bonds". The fund may invest up to 25% of assets in securities issued by companies in any single industry.
This is claimed to be a No load Mutual Fund. Morning Star rated this fund’s style as a blend of both value and growth in the large cap market and has assigned the topmost 5 star rating to this fund. The CGM Mutual Fund has given 26.15% return in the last year.

  JHancock Large Cap Equity Fund (JLVIX) Class I This large cap fund from JHancock seeks long-term capital appreciation. To pursue this goal, the Fund invests primarily in equity securities of large-cap companies and may invest up to 35% of assets in foreign securities. The management team seeks companies that are selling at what appear to be substantial discounts to their long-term intrinsic values and/or offer the potential for above-average earnings growth.
MorningStar has rated this fund with in the Large Cap and Growth grid and has assigned five star rating to this fund. This fund has given around 23% returns in the last one year.

 Janus Twenty Fund: JAVLX: Another fund similar to the JHancock fund mentioned above. The fund normally invests at least 80% of assets in a core group of 20-30 common stocks selected for their growth potential. It may invest in foreign equity and debt securities, which may include investments in emerging markets. The fund may also lend portfolio securities on a short-term or long-term basis, up to one-third of its total assets and may, within the parameters of its specific investment policies, invest its assets in derivatives. It is a non-diversified mutual fund.
MorningStar has rated this fund with in the Large Cap and Growth grid and has assigned five star rating to this fund. This fund has given around 23% returns in the last one year.
Apart from this, the Janus Aspen Forty Instl and Janus Adviser Forty I funds have also given similar returns.

  Quaker Strategic Growth Fund QAGIX The fund normally invests at least 65% of the total assets in U.S. common stocks of companies without regard to market capitalization. It generally invests up to 25% of total assets in "special situation" securities. The fund may invest up to 25% of net assets in foreign securities, including American Depository Receipts. It limits short sales to no more than 25% of total assets.
MorningStar has rated this fund with in the Large Cap and Growth grid and has assigned five star rating to this fund. This fund has given around 23% returns in the last one year.

 Jordan Opportunity: JORDX: This fund from Jordan opportunity has been a star performer over a 3 year period, in which it has given 18.5% annualized returns. The fund invests primarily in publicly trades stocks of U.S. companies irrespective of market capitalization size. It may invest up to 25% of total assets in the securities of foreign issuers. The fund will not invest more than 35% of total assets in debt securities, including direct and indirect obligations of the U.S. Government.

It may also invest up to 25% of total assets in U.S debt securities that are not investment grade securities. The fund is non diversified fund. It claims to be a no-load mutual fund and MorningStar has rated this fund with in the Large Cap and Growth grid and has assigned five star rating to this fund.

Table of Contents