Definition of Growth fund:
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.
A mutual fund that invests primarily in stocks that are expected to increase in capital value rather than yield high income.
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.
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?
- 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.
- The growth fund uses primarily stocks which can be protected in down markets by use of 100% hedging with appropriate stock index options.
- 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.
- 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