Explaination: Aggressive growth is a mutual fund investment objective that seeks high capital gain potential among growth stocks of companies that are expected to grow at a faster pace in relation to the entire stock market. In simpler terms. Aggressive growth mutual funds explain in heading 3 below aggressive growth is a more growth-oriented version of the overall growth investment strategy.
Therefore, aggressive growth can expect higher volatility (measured in beta) than a general growth strategy. It is a high relative risk, high potential revenue strategy.
The way to know the fund is aggressive growth.
Many aggressive growth stock mutual funds use the terms “aggressive growth” or “capital gains” or “capital opportunities” or “strategic equity” within the fund name. But this is not always the case. To ensure that a particular fund is an aggressive growth fund, investors can look at one of the best mutual fund research sites and find specific references to “aggressive growth” under the fund’s goals. Investors can also find the stated goal within the Mutual Funds Guide, or you can find your goal by going directly to the Mutual Fund family website.
Investors should be cautious that mutual funds with the word “aggressive growth” can become a fund that can grow into that name. There are differences in meaning between category and purpose. Simply put, a category is a label for reference and the goal is an investment strategy or philosophy.
So if you already have knoow aggressive growth mutual funds have also a growth fund in your portfolio, you may not need an active growth fund other than your funds. For additional cautions on holding funds for similar investment purposes, see Redundancy of Stocks. A good way to make sure you have an aggressive growth fund is to look at the beta version, which is a measure of the movement (ups and downs) of a particular fund relative to the overall market.
Examples of aggressive growth mutual funds
To diversify, wise investors will seek active growth funds investing in mid- or small-cap stocks. This inference means that there is a large-cap fund already in the portfolio. You do not need more than that. Some examples are Fidelity Capital Appreciation (FDCAX) and Vanguard Strategic Equity (VSEQX). FDCAX has a beta of 1.14 (compared to the S & P 500) and VSEQX has a beta of 1.24. Both are mid-cap stock funds with aggressive growth targets. Data from Morningstar, Inc. You may also want to know the risk sensitivity before adding aggressive growth factors to your mutual fund portfolio.
Dave Ramsey Investment strategy Debbie King
Investment strategies and concepts are often made complex and Dave Ramsey’s investment philosophy makes it easy for first time investors. One positive aspect of the Dave Ramsey mutual fund portfolio is that it is simple. Every investor should know four mutual funds: one aggressive growth fund, one growth fund, one growth and income fund, and one international fund.
However, your modest mutual fund guide’s perspective is a positive thing to stop. Simple things do not always translate to better ones. You have to wait a few more minutes and consider alternative and more diverse approaches to building a mutual fund portfolio.
Note: Examples of active mutual fund portfolios
Disclaimer: The information on this site is provided for discussion purposes only and should not be interpreted as investment advice. Under no circumstances does this information constitute a recommendation to buy or sell securities.