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Growth and income fund |
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Growth and income fundA mutual fund or unit trust which aims to provide investors with a balance of income and capital growth.Growth and income fundA mutual fund that invests primarily in stocks with a history of capital gains (growth) and consistent dividend payments (income).Growth and income fund Similar MatchesGrowth phaseGrowth phaseA phase of development during which a company experiences rapid earnings growth as it produces new products and expands market share. Exogenous growthExogenous growthEconomic growth that occurs without being the result of deliberate policy or behavior. The term arises because neoclassical growth models converge to a steady state in which per capita income is constant over time. Growth, then, requires exogenous technical progress. Endogenous growthEndogenous growthEconomic growth whose long-run rate depends on behavior and/or policy. Growth investingGrowth investingThe approach to investing which aims to invest in fast-growing companies which are rapidly increasing their turnover and profits, and where the expectation is to make money from a rising share price (rather than income).The theory with a growth share is that the share price rise happens in two ways:firstly, through the multiplication of a static P/E on rising earnings per share. So a company on a P/E of 7 with earnings of 10p per share has a share price of 70p. If EPS rises to 15p, its share price rises to 105p.secondly, by a re-rating of the company's P/E multiple. In the case of the company above the earnings of 105p may be accompanied by a rise in P/E ratio from 7 to 10, in which case the share price rises to 150p.Growth investing is often contrasted with value investing. The traditional view is that:value investors look for shares that are cheap in relation to the net asset value of a companygrowth investors are only interested in earnings growthIn fact, there is common ground between the two. Value investors are very interested in earnings if they can acquire them cheaply enough (i.e. on a low P/E), and growth investors don't completely ignore things like company debt and balance sheet ratios.Nevertheless, there is an important underlying distinction between the methods:value investing is based entirely or mainly on quantitative criteria (numbers): on asset values, on cash flow, and on discounted future earnings.growth investing is based on qualitative criteria: on value judgements about the business, its markets, its management, and its ability to extract future earnings growth from its industry. Guaranteed growth bondGuaranteed growth bondA bond in which a single premium secures a guaranteed amount at its maturity date. Further SuggestionsStability and Growth PactFull Employment and Balance Growth Act of 1978(Humphrey Hawkins Act) Aggressive growth mutual fund Present value of growth opportunities Economic growth Immiserizing growth growth bond growth fund compound annual growth rate Growth manager Internal growth rate Aggressive Growth Hedge Fund Growth opportunity Growth stock Biased growth Simple compound growth method Engine of growth Growth accounting Sustainable growth rate price earnings growth factor Compound growth rate Net present value of growth opportunities Normal growth firms Compound Annual Growth Rate Economic growth rate |
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