Also found in: Dictionary.
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.