Investors interested in high returns can choose mid-cap funds that come with lesser risk than small-cap funds. Mid-cap funds are not susceptible to gyrations in the broader markets. This makes these funds ideal bets given the erratic macroeconomic conditions in recent years.
Also, when capital appreciation over the long term takes precedence over dividend payouts, growth funds are natural choices for investors. These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term.
However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary while investing in these securities. This is because these may experience relatively more fluctuations than other fund classes.
Below we share with you three top-ranked mid-cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of mid-cap growth funds.
Principal MidCap Growth Fund Class J (MUTF:PMGJX) invests the majority of its assets in equities of mid-cap firms. PMGJX seeks capital appreciation over the long term. PMGJX focuses on mid-cap growth companies having higher-than-average capital and earnings growth prospects. Principal MidCap Growth J has three-year annualized returns of 7.4%.
PMGJX has an expense ratio of 1.03% compared with the category average of 1.24%.
PRIMECAP Odyssey Aggressive Growth Fund (MUTF:POAGX) seeks to provide long-term capital appreciation. POAGX invests primarily in the common stocks of U.S. companies, especially those with prospects for rapid earnings growth. The fund may also invest in common stocks of companies from different market sectors. PRIMECAP Odyssey Aggressive Growth has three-year annualized returns of 12%.
M. Ansari is one of the fund managers of POAGX since 2012.
Franklin Growth Opportunities Fund Class A (MUTF:FGRAX) invests in equity securities of companies which exhibit accelerating growth, increasing profitability, above-average growth and growth potential. FGRAX seeks to invest in common stocks of technology, consumer discretionary and healthcare sectors. The fund may also invest in small-cap companies. Franklin Growth Opportunities Fund Class A has three-year annualized returns of 8.3%
As of June 2017, FGRAX held 87 issues with 5.58% of its assets invested in Amazon.com, Inc. (NASDAQ:AMZN).
To view the Zacks Rank and past performance of all mid-cap growth mutual funds, investors can click here to see the complete list of funds.
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