Growth Mutual Fund Performance
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Growth Mutual Fund Performance
Growth mutual funds are long-term investments. Because of their tendency to fluctuate in value, growth funds may not be good short-term investments. However, in the long term, growth mutual funds tend to perform better than other types of funds.
Things To Know
- Historically, growth mutual funds have at least kept pace with inflation over time.
- A growth fund’s performance depends upon the investments held in the fund.
Look to the underlying securities
Performance of a growth mutual fund depends upon the performance of the securities it contains. They mimic their holdings. However, a growth mutual fund manager might change the composition of a fund so the outcome might not be what you expected. You need to pay attention to the prospectus and periodic reports the mutual fund sends you so that you don’t have any surprises.
Growth funds stay ahead of inflation
A key concern of investors is to keep ahead of inflation. Historically, growth mutual funds have at least kept pace with and in most cases outpaced inflation when held for many years. In the short term, they do not fare as well. Be sure to compare a potential growth fund’s one-, five-, ten-, and fifteen-year histories to get a sense of how it performs with regard to inflation and the various other market indexes. Make sure that the fund’s objectives and performance are suitable for your investment objectives, investment time horizon, and risk tolerance.
