Top 5 Growth Mutual Funds - Best of Funds

When capital appreciation over the long term takes precedence over dividend payouts, growth funds become a natural choice for investors. These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes.

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, then click here.

Pioneer Fundamental Growth A (PIGFX) seeks capital appreciation over the long term. The fund invests a large share of its assets in equity securities of large cap companies which are identical to those included in the Russell 1000 Growth Index. The growth mutual fund returned 22.58% in the last one year period.

The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.25% compared to a category average of 1.31%.

Mairs & Power Growth (MPGFX) invests the majority of its assets in common stocks. The fund may also purchase foreign securities and convertible debt rated lower than investment grade. It holds a wide range of equity securities in order to reduce portfolio turnover and manage risk. The growth mutual fund has a ten year annualized return of 5.7%.

As of December 2010, this growth mutual fund held 46 issues, with 4.84% of its total assets invested in 3M Company.

Chesapeake Core Growth (CHCGX) seeks capital growth. The fund invests heavily in equity securities focusing on investing in the largest 1,000 domestic firms. The fund focuses on acquiring common and preferred stock and related convertible securities. The growth mutual fund returned 14.02% in the last one year period.

W. Whitfield Gardner is the fund manager and he has managed this growth mutual fund since 1997.

Transamerica Focus A (IALAX) invests in companies whose market cap lies within the bounds of the Russell 1000 Growth Index. A maximum of 25% of its assets may be utilized to purchase foreign securities. Not more than 10% of its assets may be invested in real estate investment trusts. The growth mutual fund has a three year annualized return of 9.47%.

The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.55% compared to a category average of 1.31%.

Northeast Investors Growth (NTHFX) seeks capital appreciation over the long term. The fund focuses on acquiring common stocks of large domestic firms. It looks at investing in established companies with good management teams and strong financial positions. The growth mutual fund returned 16.24% in the last one year period.

William A. Oates, Jr. is the fund manager and he has managed this growth mutual fund since 1980.

To view the Zacks Rank and past performance of all growth mutual funds, then click here.

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/mutualfunds/