Mid-cap growth funds focus on realizing an appreciable amount of capital growth by investing in stocks which are projected to rally over the long term. However, a relatively higher tolerance to risk and the 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 become 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 peers in the future. Investors can click here to see the complete list of funds.
T. Rowe Price Mid-Cap Growth Fund (RPMGX – Free Report) aims for long-term capital appreciation. The fund invests majority of assets in a diversified portfolio of common stocks of mid-cap companies whose earnings T. Rowe Price expects will grow faster than other company. RPMGX has returned 15.1% over the past three years.
RPMGX has an expense ratio of 0.74% compared with the category average of 1.16%.
AB Discovery Growth Fund Class A (CHCLX – Free Report) aims for long-term capital appreciation. The fund invests majority of assets in an extensively diversified portfolio of common stocks of small and medium-capitalization companies. CHCLX has returned 22.3% over the past three years.
Bruce K. Aronow is one of the fund managers of CHCLX since 2008.
PGIM Jennison Mid-Cap Growth Fund- Class A (PEEAX – Free Report) aims for long-term capital growth. The fund invests majority of assets in equity and equity-related securities of medium capitalization companies. These companies usually have the potential for more-than-average growth. PEEAX has returned 21.3% on a year-to-date basis.
As of December 2020, PEEAX held 74 issues, with 2.64% of its assets invested in RingCentral Inc Class A.
To view the Zacks Rank and past performance of all mid-cap growth mutual funds, investors can click here to see the complete list of funds.
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