Top 5 Zacks #1 Ranked Growth Mutual Funds

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With few dividend payouts or none at all, companies whose stocks make up the portfolio of a growth fund focus almost exclusively on capital growth. These firms exhibit superior earnings growth, continuously investing them into expansions, acquisitions and research and development. Compared to the value and blend categories, this class of funds carry a relatively higher risk component. Reaping the maximum benefit from them also requires a longer investment horizon, between five to ten years. However, with the benefits of widely diversified portfolios and expert management, they are still less risky then sectoral funds.

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.

Hennessy Cornerstone Growth (HFCGX) invests in common stocks of growth oriented companies. The fund selects 50 stocks using the Cornerstone Growth Strategy, a quantitative formula. It invests 2% of the portfolio’s assets in each of these 50 stocks. The growth mutual fund has a three year annualized return of 9.48%.

Neil J. Hennessy is the fund manager and he has managed this growth mutual fund since 2000.

INTECH U.S. Growth A (JDRAX) seeks capital appreciation over the long term. The fund invests the majority of its assets common stocks included in the Russell 1000 Growth Index. It selects stocks using the INTECH mathematical investment process. The growth mutual fund has a three year annualized return of 14.99%.

As of March 2012, this growth mutual fund held 411 issues, with 3.80% of its total assets invested in Apple, Inc.

Columbia Large Growth Quantitative A (RDLAX) invests a large share of its assets in equity securities issued by companies included in the Russell 1000 Growth Index. The market capitalizations of these companies must be higher than $5 billion at the time at which these securities are purchased. The growth mutual fund has a three year annualized return of 14.78%.

The growth mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.23% compared to a category average of 1.28%.

John Hancock U.S. Global Leaders Growth A (USGLX) seeks long-term capital appreciation. The majority of the fund’s assets are utilized to purchase common stocks of firms of large cap companies. A maximum of 20% of its assets are invested in foreign firms and prominent, large cap foreign issuers. The growth mutual fund has a three year annualized return of 15.75%.

George P. Fraise is the fund manager and he has managed this growth mutual fund since 2000.

American Century Equity Growth (BEQGX) invests a large share of its assets in equity securities. It focuses on investing in large-cap companies whose shares are publicly traded in the U.S. The growth mutual fund has a three year annualized return of 13.98%.

The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.69% compared to a category average of 1.12%.

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 at http://www.zacks.com/funds.

Read the analyst report on HFCGX

Read the analyst report on JDRAX

Read the analyst report on RDLAX

Read the analyst report on USGLX

Read the analyst report on BEQGX

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