Aggressive Growth Fund
What is aggressive growth?
Aggressive growth is a sort of investment fund that tries to return the highest capital gains. These funds hold stocks of companies with potential for quick growth.
Such funds typically deliver high returns in bull markets and deep losses in bear markets. An aggressive growth fund is intended for investors not averse to risk.
An aggressive growth fund is additionally alluded to as an aggressive allocation fund. It centers around capital growth by investing to a great extent in stocks.
Normally, an aggressive growth fund would have 70 to 90 percent of the fund's assets invested in equities. By comparison, different types of funds typically incorporate a mix of bonds and fixed-income securities, for example, corporate bonds or Treasuries.
Aggressive growth funds generally fall into one of two types of investments:
Aggressive growth mutual funds — These funds are comprised of investments pointed toward supporting capital appreciation by zeroing in on the stock of companies expected to deliver a higher growth rate than the general market.
Aggressive growth hedge funds — These are funds that are managed with an accentuation on equities expected to deliver strong earnings growth.
Accordingly, the price volatility of aggressive funds is far greater compared to their less aggressive partners. Thus, they will quite often be a higher risk investment with more potential for higher returns.
Generally, an aggressive growth fund is comprised of 85 percent stocks and 15 percent bonds. Below may be the breakdown of holdings of such a fund:
- 30 percent [large-cap](/enormous cap) stocks.
- 15 percent mid-cap stocks.
- 15 percent small-cap stocks.
- 15 percent halfway term bonds.
- 25 percent foreign or emerging market stocks.
Aggressive growth model
Jeff is just 32, yet his job as a compound engineer means he is paid well and can stand to face more risk challenges his investing. He stays with a mutual fund instead of picking individual stocks since he doesn't need to do research on every one of those stocks himself. He picks an aggressive growth fund since he imagines that the economy is getting along nicely and the long-running bull market will proceed.
- Accordingly, these funds are actively managed to accomplish better than expected returns when markets are rising.
- These stocks, in any case, are likewise significantly riskier than different stocks thus these funds might underperform in down markets and experience greater volatility overall.
- An aggressive growth fund puts resources into companies that have high growth potential, including fresher companies and those in hot sectors of the economy.