What are aggressive growth funds?
An aggressive growth fund is a mutual fund that seeks capital gains by investing in the shares of growth company stocks. Investments held in these funds are companies that demonstrate high growth potential, but also carry greater risk.
A standard example of an aggressive strategy compared to a conservative strategy would be the 80/20 portfolio compared to a 60/40 portfolio. An 80/20 portfolio allocates 80% of the wealth to equities and 20% to bonds compared to a 60/40 portfolio, which allocates 60% and 40%, respectively.
| Return Type | 1 Yr | 10 Yrs |
|---|---|---|
| BEFORE TAXES Close Popover | ||
| FUND MA Aggressive Growth Portfolio (Fidelity Funds) | 25.08% | 9.82% |
| PRIMARY BENCHMARK MA Agrsv Gro Portfolio BM Close Popover | 22.81% | 9.65% |
Overview. The Morningstar Aggressive Growth ETF Asset Allocation Portfolio seeks to provide investors with capital appreciation. The Portfolio seeks to achieve its objective by investing in exchange-traded funds (ETFs) that invest primarily in equity securities of large, medium and small sized companies.
The investment objective of Index Aggressive Growth Portfolio is growth of capital over the long term by allocating its assets among equity index funds. The Portfolio's assets are allocated among underlying Fidelity index funds according to an allocation strategy that does not change over time.
The ClearBridge Aggressive Growth Fund (Ticker: SHRAX) is one example of an aggressive growth fund available for both retail and institutional investors. As of March 2022, the Fund holds $5.7 billion in assets and had a year-to-date return of -8.7% versus a return of -9.25% for its benchmark Russell 3000 Growth Index.
OVERVIEW. Aggressive Growth Portfolio seeks to achieve high (greater than the stock market as a whole), long-term appreciation in the value of its shares.
Because these funds have a large amount of exposure to firms with tremendous growth potential, they have a larger risk of volatile share price movements.
Vanguard Aggressive Growth Portfolio's main goal is to provide long-term growth by investing in two broadly diversified Vanguard funds.
- Meeder Dynamic Allocation Fund.
- JPMorgan Investor Growth Fund.
- TIAA-CREF Lifestyle Aggressive Gr Fund.
- Franklin Mutual Shares Fund.
- North Square Multi Strategy Fd.
- Gabelli Focused Growth and Inc Fd.
- E-Valuator Agrsv Growth(85%-99%)RMS Fund.
Should I invest in aggressive growth funds?
Portfolio of Investment: These funds have a high-risk profile due to their equity-heavy concentration. As a result, they are unsuitable for risk-averse investors. Risk: As the name says, these funds tend to be highly risky in the mutual fund environment.
Aggressive growth mutual funds have a higher beta, which measures their volatility against an index. Aggressive growth mutual funds are best for investors with higher risk tolerance and longer time frames.
Seeks to provide capital appreciation, investing assets into two Vanguard stock index funds (60% of assets allocated to the Vanguard Institutional Total Stock Market Index Fund and 40% to the Vanguard Total International Stock Index Fund).
While being more aggressive can make a lot of sense if you have a long time until retirement, it can really sink you financially if you need the money in less than five years. To reduce risk, investors can add more bond funds to their portfolio or even hold some CDs.
The largest Aggressive ETF is the iShares Core Aggressive Allocation ETF AOA with $1.81B in assets. In the last trailing year, the best-performing Aggressive ETF was AOA at 12.47%. The most recent ETF launched in the Aggressive space was the iShares ESG Aware Aggressive Allocation ETF EAOA on 06/12/20.
Financial professionals usually don't recommend aggressive investing for anything but a small portion of a nest egg. And regardless of an investor's age, their risk tolerance will determine if they become an aggressive investor.
| Fund | Symbol | 5-year average annual return |
|---|---|---|
| Elfun Trusts | ELFNX | 17.82 |
| Needham Aggressive Growth Retail | NEAGX | 24.49 |
| Cantor Growth Equity A | FICGX | 16.46 |
| BNY Mellon Large Cap Securities Inc | DREVX | 17.1 |
| Symbol | Name | Volume |
|---|---|---|
| PGRE | Paramount Group, Inc. | 1.036M |
| CENX | Century Aluminum Company | 2.023M |
| KODK | Eastman Kodak Company | 636,849 |
| BW | Babco*ck & Wilcox Enterprises, Inc. | 791,277 |
| Company | Symbol | Total Net Assets |
|---|---|---|
| Broadcom Inc. | AVGO | 8.24% |
| Vertex Pharmaceuticals Inc. | VRTX | 7.57% |
| UnitedHealth Group Inc. | UNH | 6.81% |
| Autodesk Inc. | ADSK | 5.88% |
Best Vanguard Funds for Aggressive Investors: Vanguard Explorer (VEXPX) Click to Enlarge If you want to turn up the growth potential and you want to go all-the-way aggressive, look no further than Vanguard Explorer (MUTF:VEXPX).
Are growth funds good investments?
The high-risk, high-reward mantra of growth funds can make them ideal for those not retiring anytime soon. Typically, investors need a tolerance for risk and a holding period with a time horizon of five to ten years. Growth fund holdings often have high price-to-earnings (P/E) and price-to-sales (P/S) multiples.
| Fund | Expense ratio |
|---|---|
| SPDR Portfolio S&P 500 Growth ETF (SPYG) | 0.04% |
| iShares Russell 1000 Growth ETF (IWF) | 0.19% |
| Schwab U.S. Large-Cap Growth ETF (SCHG) | 0.04% |
| Invesco S&P 500 GARP ETF (SPGP) | 0.34% |
- Cryptoassets (also known as cryptos)
- Mini-bonds (sometimes called high interest return bonds)
- Land banking.
- Contracts for Difference (CFDs)
A growth mutual fund is an investment vehicle that invests in stocks with above-average growth potential. While it offers the potential for high returns, it also comes with certain disadvantages, such as higher risk, potential for market volatility, and higher fees.
Equities are generally considered the riskiest class of assets. Dividends aside, they offer no guarantees, and investors' money is subject to the successes and failures of private businesses in a fiercely competitive marketplace. Equity investing involves buying stock in a private company or group of companies.
