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aggressive growth fund

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Financial Dictionary

Aggressive Growth Fund

A mutual fund that attempts to achieve the highest capital gains. Investments held in these funds are companies that demonstrate high growth potential with usually a lot of share price volatility. These funds are only for non risk-adverse investors willing to accept a high risk-return trade-off.

Investopedia Commentary

Aggressive growth funds have large betas, which means they have a large positive correlation with the stock market. In times of economic upswings, they tend to preform very well and in times of economic downturns, they tend to do very poorly. An aggressive growth fund may also invest in a company's IPO and then quickly turn around and re-sell the same stock to realize large profits. Some aggressive growth funds also invest in options to boost returns.
Also commonly referred to as a capital appreciation fund or maximum capital gains fund.

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See also: Beta, Growth Fund, Initial Public Offering - IPO, Mutual Fund, Option, Return, Risk, Risk Adverse, Risk/Return Trade-Off

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Financial Dictionary

aggressive growth fund

An investment company that attempts to maximize capital gains by investing in the stocks of companies that offer the potential of very rapid growth. Aggressive growth funds tend to produce very high returns in bull markets and relatively large losses in bear markets. Shares of an aggressive growth fund produce very little current income and are subject to wide variations in value. Also called performance fund.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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