Large-cap growth mutual funds provide excellent opportunities to investors who choose long-term capital appreciation over dividend payouts and are simultaneously interested in steady returns. Funds having significant exposure to growth securities are believed to provide higher returns. This is because growth stocks are high-quality stocks with the potential for revenue and earnings growth at a rate faster than the industry average. Though growth funds may experience more fluctuations than the other fund classes, these are suitable for investors with a higher risk tolerance and the willingness to park funds for the longer term.
Separately, large-cap mutual funds focus on acquiring securities of companies having market capitalization of more than $10 billion. Large-cap funds are ideal for investors seeking high returns that come with lower risk than the small-cap and mid-cap funds.
Below, we share with you 5 top-ranked large-cap growth mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all the large-cap growth funds, investors can click here to see the complete list of funds.
T. Rowe Price Growth Stock Fund No Load (MUTF:PRGFX) invests a large share of its assets in common stocks of companies with strong growth prospects. Though the fund generally invests in securities of domestic companies, PRGFX may also invest in common stocks of non-U.S. companies. It has a three-year annualized return of 13%.
Joseph B. Fath is the fund manager since 2014.
Schwab Large-Cap Growth Fund (MUTF:SWLSX) seeks long-term capital appreciation. It invests the lion's share of its assets in common stocks of large-cap companies with a market capitalization similar to those in the Russell 1000 Index. The fund has a three-year annualized return of 9.7%.
As of December 2015, SWLSX held 108 issues, with 7.45% of its assets invested in Amazon.com Inc. (NASDAQ:AMZN).
MassMutual Premier Disciplined Growth Fund (MUTF:DEIGX) invests primarily in common stocks of growth-oriented companies. It is believed to maintain a portfolio that provides higher returns than the Russell 1000 Growth index. The fund has a three-year annualized return of 10.5%.
DEIGX has an expense ratio of 0.70%, as compared to the category average of 1.18%.
Laudus U.S. Large Cap Growth Fund No Load (MUTF:LGILX) seeks growth of capital over the long run. It invests the majority of its assets in equity securities of large-cap domestic companies with a market capitalization greater than $3 billion. LGILX may invest a maximum of one-fifth of its assets in securities of foreign companies. The fund has a three-year annualized return of 9.1%.
Lawrence G. Kemp is the fund manager since 2013.
Frost Growth Equity Fund A (MUTF:FACEX) invests a large chunk of its assets in equity securities of companies located in the U.S. It may also invest in securities of companies located in foreign lands and ADRs. The fund chooses to hold securities for a longer period of time. It has a three-year annualized return of 10.7%.
FACEX has an expense ratio of 1.05%, as compared to the category average of 1.18%.