Growth Funds Explained

Growth Funds have a focus on growing your investment rather than providing a steady income. Equity Funds and Mixed Asset Funds are most closely associated with this aim.

Growth Funds by their very purpose want to grow your capital. This means that funds targeting this purpose will be predominantly investing in shares or equities to grow your capital – greater risk means greater reward.

So within this area, you are likely to find the following sectors:

  • UK Equities including UK All companies (funds investing 80% or more into UK-listed equities) and UK Smaller Companies (funds investing 80% or more in the bottom 10% of UK-listed companies by market capitalisation or value.
  • Overseas Equities including Global Equity (funds investing 80% or more into global equities or shares), North America and North American Equities (similar premise to requirement of UK Equity Funds as above), Japan (again 80% or more invested in Japanese Equities).
  • Mixed Asset including Mixed Investment 0-35% Shares, Mixed Investment 20-60% Shares, you get the idea by now. These Mixed Asset Funds in a variety of assets, but denote requirements for the limits or holding of Shares or Equities.

Is is highly likely that you invest in a type of Growth Fund as part of your portfolio. When you are choosing what funds to invest in, it is important you pay close attention to the Fund Factsheet to understand the objectives of the fund as well as the top 10 holdings of it so you see the nature of the investments being made.

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