Growth mutual funds target companies with high growth potential. These companies are expected to outperform the broader market by achieving above-average revenue and earnings growth rates. Today, we have focused on two growth mutual funds – FDGRX and RPMGX – with over 10% upside potential in the next twelve months, as projected by analysts.
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Let’s take a closer look at both funds.
Fidelity Growth Company Fund Retail Class (FDGRX)
The FDGRX fund aims to achieve long-term growth for investors by focusing on large-cap companies with a history of steady earnings and financial stability. Further, it invests in foreign securities to diversify a portfolio and potentially offer higher returns.
The fund has an expense ratio of 0.72%, making it a cost-effective option. Interestingly, FDGRX has generated a return of 32.3% over the past six months.
Overall, FDGRX has a Moderate Buy consensus rating. This is based on the weighted average consensus rating of each stock held in the portfolio. Of the total stocks held, 301 have Buys, 57 have a Hold rating, and five have a Sell rating. The analysts’ average price target on the FDGRX fund of $46.48 implies a 13.45% upside potential from the current levels.
T. Rowe Price Mid-Cap Growth Fund (RPMGX)
The RPMGX fund invests about 80% of its net assets in mid-sized companies with strong growth potential. It seeks to provide long-term capital appreciation. Additionally, the fund has an expense ratio of 0.76%. The RPMGX fund has returned over 6% in the past six months.
On TipRanks, RPMGX has a Moderate Buy consensus rating. This is based on 102 stocks with a Buy rating and 17 stocks with a Hold rating. The analysts’ average price target on the RPMGX mutual fund of $121.18 implies about 17.26% upside potential from the current levels.
Concluding Thoughts
Investing in mutual funds has several benefits, such as diversification and higher liquidity than individual stocks. This, coupled with the projected upside potential of FDGRX and RPMGX, makes these funds worth considering by investors. However, a prudent approach necessitates in-depth research before investing.
