What to look for in a growth fund?

The type of fund you choose can determine the level of profits you can earn; there are a few features to consider when choosing good growth funds. Here are a few different characteristics:

Growth option:

The investor will not receive dividends, rather allows the company to reinvest any earnings into further growth. This will lead to fast expansion and growth. The initial capital has to be rolled up to become a huge business.

Dividend reinvestment option:

This is the same as growth option; earnings are reinvested instead of paying it out as dividends. However, in this case they’re used to purchase more shares in the fund. Investors receive more fund units as a result.

Dividend pay-out option:

It is a rare case to find growth funds with dividend earnings. Dividends are paid automatically into a bank account in most cases; the owner has to provide a bank account to attach to receive the dividend at the maturity time.