Growth Fund Law and Legal Definition
Growth fund is a mutual fund that typically invests in well established companies whose earnings are expected to increase. It is a mutual fund that offers long-term capital appreciation. This involves investing in companies with higher risk than other portfolios. Growth funds seek to achieve its objective by investing in growth stocks companies that reinvest earnings to build their business through expansion, acquisition, or research and development.
Usually, growth funds pay small dividends but offer the potential for large share price increases. Growth funds offer substantial potential gains over time but vary significantly in price during bull and bear markets. This type of fund is most appropriate for someone who will not need to withdraw funds in the near future.