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Mid-cap growth funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms, the value of which is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because these may experience relatively more fluctuations than other fund classes.
Investors interested in high returns can choose to invest in mid-cap funds that come with lesser risk than small-cap funds. Mid-cap funds are not susceptible to volatility in the broader markets. This makes these funds ideal bets given the erratic macroeconomic conditions in recent years. Also, when capital appreciation over the long term takes precedence over dividend payouts, growth funds are a natural choice for investors.
Below we share with you three top-ranked mid-cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of mid-cap growth funds.
Baird MidCap Investor BMDSX seeks capital growth for the long run. BMDSX invests the lion’s share of its assets in equity securities of domestic and foreign mid-cap companies. The fund focuses on investing mainly in common and preferred stocks, and in ADRs which are traded on key U.S. exchanges. Baird MidCap Investor has one-year annualized returns of 20.3%.
As of October 2017, BMDSX held 60 issues, with 2.41% of its assets invested in Diamondback Energy Inc.
TIAA-CREF Mid-Cap Growth Retirement TRGMX invests a bulk of its assets in mid-cap companies, as defined by its benchmark Russell Midcap Growth Index. The fund focuses on investing in those mid-cap companies, which are expected to have strong growth potential. TRGMX seeks favourable returns through growth of capital. TIAA-CREF Mid-Cap Growth Retirement has one-year annualized returns of 21.3%.
George Ted Scalise is one of the fund managers of TRGMX since 2006.
T. Rowe Price Mid-Cap Growth Advisor PAMCX seeks appreciation of capital for the long run. PAMCX maintains a diversified portfolio by investing in common stocks of mid-cap companies, earnings of which are expected to have above-average growth prospects. Companies that fall within the range of the Russell Midcap Growth Index or S&P MidCap 400 Index are considered mid cap. T. Rowe Price Mid-Cap Growth Advisor has one-year annualized returns of 21.1%.
PAMCX has an expense ratio of 1.02% compared with the category average of 1.23%.
To view the Zacks Rank and past performance of all mid-cap growth mutual funds, investors can click here to see the complete list of funds.
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