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Funds in Value Line’s Growth/Income objective group place equal emphasis on capital growth and current income, or growth of income, mainly through investments in common stocks. Although this balanced description may seem like a fine line of distinction from a fund that seeks capital appreciation with a secondary objective of income, or a fund that seeks income with a secondary objective of capital growth, it indicates an important difference. Funds in the Growth objective group and the Income objective group both have specific first-tier goals—Growth/Income funds, meanwhile, are, in some ways, the midpoint between the other two.  

That said, the Growth & Income objective group covers a broad range of funds, and there is no particular naming convention that one can point to that differentiates these funds from those that reside in the Growth or Income objectives. Value, however, is a frequent inclusion in names of funds here.  

Options range from focus funds, which hold only a small number of stocks, to broadly diversified funds. There are funds that take a growth-oriented approach and those that hone in on value investments. Size is another factor that often comes into play, with funds available that tend to focus on select areas of the market-cap spectrum. Note, however, that small-cap and mid-cap funds tend to reside in the Small Cap objective group.

There are also some thematic funds in this objective group, for example several socially responsible funds make an appearance here. In the end, there are a large number of options in the Growth/Income objective group, so investors need to ensure that they take the time to fully understand what the funds they are examining actually do to achieve their stated goals.

Over the long term, the Growth/Income objective group has been a decent performer relative to the broader market, as measured by the S&P 500 Index. For the 10-year period ended July 31, 2013, the group had an annualized gain of 7.0%, while the S&P 500 Index reported a gain of 7.6%. For five years and three years, the group had reported gains of 7.0% and 15.3%, respectively, while the Index reported advances of 8.2% and 17.7%, respectively. During the one-year period ended July 31, 2013, the Growth/Income objective group reported a return of 24.3%, compared to a return of 25.0% for the S&P. The group has an average Risk Rank of 3, indicating that funds in this group might appeal to most investors. 

Year to date through July 31, 2013, the Growth/Income objective group was outperformed by the broader market, reporting a gain 18.4% compared to a gain of 19.6% for the S&P 500 Index.


Fund Name: Matrix Advisor Value Fund
Ticker: MAVFX
Year-to-Date: 28.16%
Investment Adviser: Matrix Asset Advisors, Inc.
Benchmark: S&P 500 Index
Objective: The Fund seeks to achieve a total rate of return which is comprised of capital appreciation and current income.
Investment Strategy:
• Invests primarily in both dividend and non-dividend paying common stocks of domestic U.S. companies that the Advisor believes are financially strong and meet specific valuation criteria using the principles of value investing based on Classic Valuation Analysis.
• Invests in large capitalization companies, which the advisor defines as companies with minimum market capitalizations of $2 billion at the time of purchase.
•  The fund may invest in any sector.
• The advisor may overweight the fund’s portfolio in one or more particular sectors, and/or underweight the fund’s portfolio or not invest in one or more particular sectors.


Fund Name: Hotchkis and Wiley Large Cap Value Fund A
Ticker: HWLAX
Year-to-Date: 26.70%
Investment Adviser: Hotchkis & Wiley Capital Management, LLC.
Benchmark: Russell 1000 Index; Russell 1000 Value Index; S&P 500 Index
Objective: The fund seeks current income and long-term growth of income, as well as capital appreciation
Investment Strategy:
• Normally invests at least 80% of its net assets plus borrowings for investment purposes in common stocks of large capitalization U.S. companies. 
• Also invests in stocks with high cash dividends or payout yields relative to the market.
• May also invest in foreign (non-U.S.) securities.
• Employs a fundamental value investing approach which seeks to exploit market inefficiencies created by irrational investor behavior.
• Does not employ predetermined rules for sales; rather, the fund evaluates each sell candidate based on the candidate’s specific risk and return characteristics which include: 1) relative valuation; 2) fundamental operating trends; 3) deterioration of fundamentals; and 4) diversification guidelines.


Fund Name: Blackmark Basic Value Fund A
Ticker: MDBAX
Year-to-Date: 25.76%
Investment Adviser: BlackRock Advisors, LLC
Benchmark: Russell 1000 Value Index; S&P 500 Index
Objective: To seek capital appreciation and, secondarily, income by investing in securities, primarily equity securities, that management believes are undervalued and therefore represent basic investment value.
Investment Strategy:
• The Fund is a “feeder” fund that invests all of its assets in Master Basic Value LLC, which has the same investment objectives and strategies as the fund.
• Invests primarily in equity securities that management believes are undervalued.

• Management places particular emphasis on companies with below average price/earnings ratios that may pay above average dividends.
• Invests primarily in common stock of U.S. companies.
• Focuses on companies with market capitalizations of over $5 billion.

In the table below, we have listed 10 top-performing funds through July 31, 2013 that we follow in our Fund Advisor database.

  

10 Top Growth/Income 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 

SunAmerica Focused Div Strategy A 

FDSAX 

31.71 

5.89 

11.54 

24.70 

15.64 

Matrix Advisor Value Fund 

MAVFX 

28.16 

6.05 

11.24 

18.59 

4.69 

American Beacon MidCap Value A 

ABMAX 

26.58 

6.44 

9.94 

18.72 

  

Hotchkis and Wiley Large Cap Value A 

HWLAX 

26.70 

5.38 

8.13 

19.90 

8.69 

Neuburger Berman Multi-Cap Opportunity Fund A 

NMUAX 

26.10 

7.49 

7.66 

18.09 

  

BlackRock Basic Value Fund A 

MDBAX 

25.76 

5.97 

10.50 

17.57 

8.10 

Lord Abbot Fundamental Equity Fund A 

LDFVX 

24.39 

6.02 

7.98 

16.35 

8.61 

UBS US Large Cap Equity Fund A 

BNEQX 

24.34 

6.30 

7.98 

16.90 

6.65 

T. Rowe Price Value Fund 

TRVLX 

24.30 

5.64 

8.11 

16.40 

9.08 

RS Large Cap Alpha Fund A 

GPAFX 

24.05 

5.07 

7.83 

15.98 

7.26 

Growth/Income Objective Group 

  

18.38 

4.88 

5.72 

12.38 

6.99 

  

  

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