Growth Fund

AAA

DEFINITION of 'Growth Fund'

A diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no dividend payouts. Portfolio companies would mainly consist of companies with above-average growth in earnings that reinvest their earnings into expansion, acquisitions, and/or research and development.

INVESTOPEDIA EXPLAINS 'Growth Fund'

Most growth funds offer higher potential capital appreciation but usually at above-average risk. Growth funds are more volatile than funds in the value and blend categories. The companies in a growth fund portfolio are in an expansion phase and they are not expected to pay dividends. Investing in growth funds requires a tolerance for risk and a holding period with a time horizon of five to 10 years.

RELATED TERMS
  1. Capital Appreciation

    A rise in the value of an asset based on a rise in market price. ...
  2. Diversified Common Stock Fund

    A mutual fund that invests its assets in a relatively large number ...
  3. Conservative Growth

    An investment strategy that aims to grow invested capital over ...
  4. No-Load Fund

    A mutual fund in which shares are sold without a commission or ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in ...
RELATED FAQS
  1. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  2. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
  3. How attractive is the food and beverage sector for a growth investor?

    The food and beverage sector is attractive for a growth investor. The sector's high degree of volatility means it tends to ... Read Full Answer >>
  4. What techniques are most useful for hedging exposure to the insurance sector?

    Investing style determines the best hedging techniques for the insurance sector. This sector comprises three segments, two ... Read Full Answer >>
  5. How attractive is the retail sector for a growth investor?

    Retail is an attractive sector for a growth investor due to its propensity for turning in bigger-than-average gains when ... Read Full Answer >>
  6. What action is the SEC likely to take on 12b-1 fees?

    The Securities and Exchange Commission (SEC) may take action to impose greater regulation on how 12b-1 fees are used, or ... Read Full Answer >>
Related Articles
  1. Investing

    Steady Growth Stocks Win The Race

    Take a page from the fable of the tortoise and the hare by investing in these constant growth stocks.
  2. Investing Basics

    Precious Metals Funds: A Golden Opportunity?

    Used intelligently, precious metals can help an investor obtain decent returns in a terrible market.
  3. Mutual Funds & ETFs

    How To Pick A Good Mutual Fund

    Learn how to evaluate mutual funds and find the right one for you.
  4. Mutual Funds & ETFs

    Digging Deeper Into Mutual Fund Names

    Go beyond the name and find out if that fund fits into your portfolio.
  5. Options & Futures

    Variety A Bitter Spice For Investors

    Faced with too many choices? Find out how to cut the confusion and create a palatable portfolio.
  6. Mutual Funds & ETFs

    Understanding The Mutual Fund Style Box

    Evaluate your investments with this simple tool.
  7. Retirement

    Turnover Ratios Weak Indicator Of Fund Quality

    This indicator is not as important as some investors might think.
  8. Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.
  9. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI EAFE Index

    Discover how the iShares MSCI EAFE Index ETF is managed, and learn which investors may benefit from adding the fund to a portfolio.
  10. Mutual Funds & ETFs

    ETF Analysis: Vanguard International Stock

    Discover how the Vanguard Total International Stock ETF is managed, and learn which investors may find it suitable as part of a diversified portfolio.

You May Also Like

Hot Definitions
  1. Dog And Pony Show

    A colloquial term that generally refers to a presentation or seminar to market new products or services to potential buyers.
  2. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  3. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  4. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  5. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  6. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!