Growth fund

Growth fund,

Definition of Growth fund:

  1. This high-risk, high-reward mantra makes growth funds ideal for those not retiring anytime soon. Investors need a tolerance for risk and a holding period with a time horizon of five to 10 years. Growth fund holdings often have high price-to-earnings and price-to-sales multiples. This trade-off from investors is the above-average revenue and earnings gains these companies produce.

  2. A mutual fund that invests primarily in stocks that are expected to increase in capital value rather than yield high income.

  3. A mutual fund that invests in stocks that are in the growth stage of their business cycle. Growth stocks are generally viewed as entailing more risk to principal than income stocks.

  4. A growth fund is a diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no dividend payouts. The portfolio mainly consists of companies with above-average growth that reinvest their earnings into expansion, acquisitions, and/or research and development (R&D). Most growth funds offer higher potential capital appreciation but usually at above-average risk.

How to use Growth fund in a sentence?

  1. Growth funds are separated by market capitalization into small-, mid- and large-cap, with large-cap the biggest class of funds, with a nearly 10% market share.
  2. The growth fund uses primarily stocks which can be protected in down markets by use of 100% hedging with appropriate stock index options.
  3. A growth fund is a mutual fund or exchange-traded fund (ETF) that includes companies primed for revenue or earnings growth at a pace that is faster than that of either industry peers or the market overall.
  4. Most growth funds are high-risk, high-reward and are therefore best suited to market participants with a long-term investment horizon and a healthy risk tolerance.

Meaning of Growth fund & Growth fund Definition