Mid-cap growth funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms, the value of which is projected to rise over the long term. However, a relatively higher tolerance to risk and willingness to park funds for the longer term are necessary when investing in these securities. This is because these may experience relatively more fluctuation than the other fund classes.
Investors interested in high returns can choose to invest in mid-cap funds that come with lesser risk than small-cap funds. Mid-cap funds are not susceptible to volatility 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 a natural choice for investors.
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.
PRIMECAP Odyssey Aggressive Growth (POAGX – Free Report) seeks to provide long-term capital appreciation. POAGX invests primarily in the common stocks of U.S. companies, especially those with prospects of rapid earnings growth. The fund may also invest in common stocks of companies from different market sectors. PRIMECAP Odyssey Aggressive Growth has returned 30.4% in the past year.
Theo A. Kolokotrones is one of the fund managers of POAGX since 2004.
T. Rowe Price Mid-Cap Growth Advisor (PAMCX – Free Report) seeks appreciation of capital for the long run. PAMCX maintains a diversified portfolio by investing in common stocks of mid-cap companies, earnings of which are expected to have above-average growth prospects. Companies that fall within the range of the Russell Midcap Growth Index or S&P MidCap 400 Index are considered mid cap. T. Rowe Price Mid-Cap Growth Advisor has one-year annualized returns of 17.5%.
