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Value Line’s Growth objective group is by far the largest group under review. It is broadly constructed on purpose, taking into consideration any fund that has a primary objective of capital growth. Income can be a secondary objective. Weeded out are funds that follow more-specific mandates, such as capital growth by investing in small and mid-cap companies or sector-oriented funds. To fine-tune what is an extremely diverse grouping of funds, we use peer groups.

That said, why such a broad category? The main purpose is to put funds together that, by prospectus, are trying to do the same things. While it is important to view certain funds against smaller, similar groups, it is a mistake to take them completely out of the broader construct within which they operate. Investors should be keenly aware that a fund that is the best out of 20 or 30 specific peers may still be a laggard when compared to a broader group of competition. Unless such a fund is owned for a very specific reason, there would likely be better investment options.

Despite the objective’s title of Growth, this category can contain both growth- and value-oriented funds. In fact, there is a wide variety of funds here, spanning from the expected index funds all the way to focused funds that own just a handful of stocks. Managers can take any number of approaches to investing, too, including growth, value, growth at a reasonable price, socially focused, market-neutral, and tax-minimizing strategies, or, in some cases, a combination of these.

Over the long term, the Growth objective group has kept pace with the broader market, as measured by the S&P 500 Index. For the 10-year period ended April 30, 2013, the group had an annualized gain of 7.7%, while the S&P 500 also reported a return of 7.9%. For five years and three years, the group had annualized gains of 4.1% and 10.2%, respectively, while the S&P 500 reported increases of 5.2% and 12.8%, respectively. During the past year, the Growth objective group reported a return of 12.7%, compared to 17.2% for the S&P 500. The group has an average Risk Rank of 3, indicating an average level of risk. Below are some highlights from the group.

Fund Name: Sterling Capital Mid Value Fund A
Ticker: OVEAX
Year-to-Date Return: 19.09%
Investment Advisor: Sterling Capital Management LLC
Benchmark: Russell MidCap Value Index
Objective: The fund seeks long-term growth of capital by investing in equity securities of companies that are considered to be undervalued.
Investment Strategy:
• Invests at least 80% of its net assets plus borrowings for investment purposes in the securities of middle capitalization companies
• Primarily invests in domestically traded U.S. common stocks, U.S. traded common stocks of foreign companies
• May have exposure to emerging markets through its investments in ADRs


Fund Name: PRIMECAP Odyssey Growth Fund
Ticker: POGRX
Year-to-Date Return: 18.86%
Investment Advisor: PRIMECAP Management Company
Benchmark: S&P 500 Index
Objective: The fund seeks long-term capital appreciation.
Investment Strategy:
• Invests primarily in the stocks of U.S. companies
• Invests at least 80% of its net assets in stocks across all market sectors and market capitalizations, though it has historically invested primarily in large- and mid-capitalization companies
• May also invest in foreign securities through depository receipts or stocks traded on a foreign exchange

Fund Name: RS Value Fund A
Ticker: RSVAX
Year-to-Date Return: 16.97%
Investment Advisor: RS Investment Management Company LLC
Benchmark: Russell MidCap Value Index
Objective: The fund seeks to provide long-term capital appreciation.
Investment Strategy:
• Principally invests in equity securities that the Fund’s investment team believes are undervalued,
• Invests in companies with market capitalizations between $1 billion and 120% of the market capitalization of the largest company included in the Russell Midcap®Index on the last day of the most recent quarter
• Typically invests most of its assets in securities of U.S. companies but may also invest any portion of its assets in foreign securities
• Typically holds between 40 and 60 securities positions


In the table below, we have listed 10 top-performing funds through April 30, 2013 that we follow in The Value Line Fund Advisor’s database.

10 Top Growth Funds Performance

 

Fund Name

Ticker

% Year-to-date

Total Return

% 1 Month

Total

Return

% 3

Month

Total

Return

% 6 Month

Total

Return

% 5 Year

Total

Return

Annualized

Legg Mason Capital Management Opportunities A

LGOAX

26.78

4.75

14.01

36.48

  

Sterling Capital Mid Value A

OVEAX

19.09

2.48

9.13

22.72

9.05

PRIMECAP Odyssey Growth Fund

POGRX

18.86

2.74

10.75

23.20

8.90

Snow Capital Opportunities A

SNOAX

18.14

0.49

8.29

26.24

5.95

Prudential Mid-Cap Value A

SPRAX

17.38

0.94

8.80

21.64

7.92

Eventide Gilead Fund A

ETGLX

17.28

3.78

10.32

19.79

  

RS Value A

RSVAX

16.97

1.64

8.67

20.96

4.24

Touchstone Mid Cap A

TMAPX

16.72

0.05

8.54

19.79

5.20

Diamond Hill Select A

DHTAX

16.46

1.59

6.66

18.91

5.02

J Hancock Classic Value A

PZFVX

16.49

2.36

7.73

20.87

2.44

Growth Objective Group

  

  

10.94

1.09

5.36

13.50

4.08

  

At the time of this article's writing, the author did not have positions in any of the funds mentioned.