Mar 26 2009
Growth funds and ‘Growth and income’ funds Investment
? Growth funds consist of stocks in larger, more established U.S. companies. Stock prices are volatile; however, the price of shares in established companies is comparatively less volatile than the price of shares in small, untested companies. Consequently, growth funds are a bit less risky than aggressive growth funds.
Risk: High
Potential for capital appreciation: Moderate
Potential for current income: Low
? Growth and income funds combine growth stocks with stocks in companies that pay high dividends. Some growth and income funds also invest in convertible securities and/or bonds and money market instruments. Others get the income side of the equation by selling call options on the stocks in their portfolio.
Risk: Moderate
Potential for capital appreciation: Moderate
Potential for current income: Moderate
