Growth Mutual Funds Key Terms

Help your funds grow with growth mutual funds key terms

If you are in charge of investing your company's money in the stock market and are looking for a way to diversify or make more profit, consider growth mutual funds. If you are unfamiliar with what growth mutual funds entail, learning a few key terms can help you decide if this is the right direction to take with your company's money. Growth mutual funds have the potential to make quick money, but if they are not watched closely, they also have the potential to make you lose money just as quickly.

Capital appreciation

The term capital appreciation means that the value of your asset has increased based on the rise of the market price of said asset.

Conservative growth

When your investment is in the conservative growth category, what that means is that there is low risk involved and it is a long term commitment.

Turnover ratio

The turnover ratio of an investment is the number of times that holdings are put up for sale in a pre-determined time period, for example, one fiscal year.

Diversified common stock fund

A diversified common stock fund is a type of growth fund that has all of its holdings in stocks. The number of stocks that the fund participates in may range from a couple to a few hundred.

No-load fund

A no-load fund is a commission free growth mutual fund. This type of fund is able to be commission free because the shares come right from the investment company instead of going through a second party, who is primarily responsible for charging commission.

Risk-return tradeoff

The risk-return tradeoff of a growth mutual fund is the calculation of the risk and potential return of investment. High risk investments carry a potential for a high return, while low risk investments carry a potential for a low return.