AGGRESSIVE GROWTH FUND Meaning and
Definition
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An aggressive growth fund refers to a type of mutual fund or investment fund that is designed to generate high returns through investing in stocks of companies with strong growth potential. The primary objective of an aggressive growth fund is to achieve capital appreciation or significant growth in the value of the investment over the long term.
This type of fund typically invests in stocks of companies, often categorized as small-cap or mid-cap, that are anticipated to experience rapid growth rates and high earnings potential. The fund manager selects investments based on the expectation that these stocks will outperform the market and yield substantial returns over time.
Due to the higher-risk nature of its investments, an aggressive growth fund tends to have a higher volatility than other types of funds. It typically seeks capital appreciation over income generation, and hence, may not provide regular dividends. Investors attracted to aggressive growth funds are often willing to tolerate short-term market fluctuations in exchange for the potential for higher long-term gains.
Investing in an aggressive growth fund is suitable for investors with a higher risk appetite and a longer investment horizon. The fund aims to deliver above-average returns, but it also carries a higher degree of market risk. Therefore, it is crucial for potential investors to carefully evaluate their risk tolerance and consider their investment goals before including aggressive growth funds in their portfolio.
