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Growth fund |
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Growth fundA unit or investment fund which invests in the stocks of growth companies.Since growth companies often do not pay dividends, the income of the funds which invest in them is correspondingly low. The fund's objective is to achieve high capital appreciation. However the investment risk is correspondingly greater.Also known as maximum capital gains funds or capital appreciation funds.Growth fundA mutual fund that invests primarily in stocks with a history of and future potential for capital gains.Growth fund Similar MatchesGuaranteed growth bondGuaranteed growth bondA bond in which a single premium secures a guaranteed amount at its maturity date. 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. Endogenous growthEndogenous growthEconomic growth whose long-run rate depends on behavior and/or policy. Growth and income fundGrowth and income fundA mutual fund or unit trust which aims to provide investors with a balance of income and capital growth. Simple compound growth methodSimple compound growth methodCalculating a growth rate by relating terminal value to initial value and assuming a constant percentage annual rate of growth between the two values. Further SuggestionsGrowth stockGrowth rates organic growth Economic growth capital growth Present value of growth opportunities Internal growth rate Normal growth firms Growth and income fund Exogenous growth Capital growth growth stocks growth bond Aggressive Growth Hedge Fund Compound Annual Growth Rate compound annual growth rate Growth accounting Full Employment and Balance Growth Act of 1978(Humphrey Hawkins Act) Constant growth model price earnings growth factor Compound growth rate Growth Immiserizing growth Aggressive growth mutual fund Growth opportunity |
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