Aggressive-Growth Fund

Aggressive-Growth Fund

A mutual fund that invests primarily or exclusively in high-risk, high-return securities. They may invest in IPOs and quickly re-sell; they also commonly invest in options. Very little of the income from an aggressive growth mutual fund comes from dividends; rather, most of its earnings come from capital appreciation. They have a high degree of volatility, and tend to correlate highly with stock market performance; that is, they do well when stock markets do well and poorly otherwise. Some analysts believe that while aggressive growth mutual funds correlate in this way, they do so more strongly, meaning that their values increase and decrease more steeply than stock markets as a whole.

---

Aggressive-growth fund. Aggressive-growth mutual funds buy stock in companies that show rapid growth potential, including start-up companies and those in hot sectors.

While these funds and the companies they invest in can increase significantly in value, they are also among the most volatile. Their values may rise much higher -- and fall much lower -- than the overall stock market or the mutual funds that invest in the broader market.