Capital Appreciation Fund
A mutual fund that attempts to increase asset value primarily through investments in growth stocks. The heavy investment in growth stocks increases the risk associated with these types of funds. Also called "aggressive growth fund".
Investopedia Commentary
As its name suggests, a capital appreciation fund seeks to deliver value to shareholders by investing in companies with appreciating share prices.
This type of fund is the exact opposite of an income or dividend fund, which focuses on investing in companies that pay shareholders a dividend. In addition to risk tolerance, something else to consider when analyzing these different types of funds is the fact that capital gains are usually taxed lower than interest income.
Related Links
Mutual Fund Basics Tutorial
Advantages Of Mutual Funds
Disadvantages of Mutual Funds
When To Sell A Mutual Fund
How Dividends Work For Investors
See also: Aggressive Growth Fund, Appreciation, Capital Appreciation, Capital Gain, Depreciation, Dividend, Income Fund, Mutual Fund, Return on Capital Gains, Risk Tolerance
Also spelled: aggressive growth fund