Aggressive Growth Funds Definition : Aggressive Growth Fund, as the name suggests, is a type of equity fund which aims to produce high returns for investors by taking comparatively higher quantum of risk. The underlying portfolio could be skewed towards mid and small-cap stocks which have high growth potential but are also very volatile. Explanation : The fund is aggressive in the sense that it invests most of its assets in high-risk, high-return securities. Such stocks may produce high return in a bull market but may incur losses in a bear market. The beta of such stocks is high and has a large positive correlation with the stock market, resulting in higher returns when the overall market is doing well. Such funds are mostly suited for investors who have higher risk appetite. Some aggressive growth funds may even invest in derivatives, such as options, in order to increase their gains.
Posted on: Wed, 20 Aug 2014 01:36:38 +0000
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