Growth Fund

Growth fund

A mutual fund that invests primarily in stocks with a history of and future potential for capital gains.

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Growth Fund

A portfolio or mutual fund in which the primary goal is capital appreciation of the securities represented therein. That is, the investor or shareholder does not expect dividends and most returns on investments come in higher share prices. This involves investing in companies with higher risk than other portfolios. For example, a growth fund will likely invest in a promising start-up with a great outlook instead of a blue-chip company with a reliable, but not exciting, outlook. In addition to risk, a growth fund requires a relatively long time horizon, as start-ups and similar companies often take time to appreciate. See also: Plow back, Buy low, sell high, Income fund, Growth and income fund.

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growth fund

An investment company whose major objective is long-term capital growth. Growth funds offer substantial potential gains over time but vary significantly in price during bull and bear markets. This type of fund is most appropriate for someone who will not need to withdraw funds in the near future.

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Growth fund. A growth fund seeks to provide its shareholders with long-term capital appreciation.

Growth funds seek to achieve that objective by investing in growth stocks -- companies that reinvest earnings to build their business through expansion, acquisition, or research and development.

Growth funds, which may focus on companies of the same size -- say all small-caps -- or include companies of different sizes in their portfolios, tend to be more volatile than funds with more conservative goals, such as providing regular if modest income.

Not surprisingly, the greater the potential for profit that a growth fund may provide comes with the increased risk of losing capital.