UK Accounting Glossary
A growth fund is a portfolio of securities whose investment goal is to grow in value over time. A growth fund invests primarily or fully in stocks, as stocks have the potential to appreciate greatly. It is common for the companies in a growth fund to avoid paying dividends to their shareholders; they are more likely to reinvest those dividends to finance their growth. The stocks in a growth fund are generally volatile because volatile stocks have a high appreciation potential. Investors who choose a growth fund may have a high-risk tolerance, and they generally do not seek income from the fund. The opposite of a growth fund is an income fund, which focuses on paying its shareholders income.
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This glossary post was last updated: 9th February 2020.