Loading...

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 March 29, 2013, the group had an annualized gain of 7.9%, while the S&P 500 Index reported a gain of 8.5%. For five years and three years, the group had reported gains of 4.7% and 10.7%, respectively, while the Index reported advances of 5.8% and 12.7%, respectively. During the one-year period ended March 29, 2013, the Growth/Income objective group reported a return of 12.7%, compared to a return of 14.0% 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 March 29, 2013, the Growth/Income objective group was outperformed by the broader market, reporting a gain 10.1% compared to a gain of 10.6% for the S&P 500 Index. Below we have highlighted a handful of the top performers.


Fund Name: Neuberger Berman Multi-Cap Opportunities Fund A
Ticker: NMUAX
Year-to-Date Return: 16.39%
Investment Adviser: Neuberger Berman Management LLC
Benchmark: S&P 500 Index
Objective: The Fund seeks long-term total return
Investment Strategy:
• The fund invests in a concentrated portfolio (consisting mainly of common stocks)
• May hold stocks of companies of any market capitalization and in any sector
• Holds a limited number of stocks
• Possible ways to increase value: free cash flow generation, product or process enhancements, margin increases, and improved capital structure management
•  Invests primarily in domestic stocks; it may also invest in stocks of foreign companies
• May emphasize certain sectors that will benefit from market or economic trends
• Non-diversified


Fund name: Homestead Value Fund
Ticker: HOVLX
Year-to-Date REturn: 15.17%
Investment Adviser: RE Advisers Corporation
Benchmark: Standard & Poor’s 500 Stock Index
Objective:  A stock fund that seeks capital growth over the long term and secondarily, income
Investment Strategy:
• The fund invests in stocks of established companies selling below what RE Advisers believes to be fundamental value
• Will invest at least 80% of its total assets in common stocks of these companies
• To determine whether a stock is undervalued, RE Advisers considers, among other factors, earnings valuations, debt ratios and any competitive advantages a company may have


Fund Name: SunAmerica Focused Dividend Strategy Fund A
Ticker: FDSAX
Year-to-Date Return: 14.33%
Investment Adviser: SunAmerica Asset Management Corporation
Benchmark: S&P 500 Index
Objective: The Fund seeks total return including capital appreciation and current income
Investment Strategy:
• The Fund’s principal investment strategy is value
• Will invest at least 80% of its net assets, (plus any borrowing for investment purposes, will be in dividend yielding equity securities)
• Selects up to thirty high dividend yielding common stocks; (first ten stocks selected will represent the ten highest yielding stocks within DJ Industrial Average; next twenty stocks will be selected from the Russell 1000 Index).

In the table below, we have listed 10 top-performing funds through March 29, 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

Neuberger Berman Multi-Cap Opp A

NMUAX

16.39

4.70

16.39

18.51

  

Homestead Value Fund

HOLVX

15.17

5.11

15.17

17.83

6.43

Neuberger Berman Guardian A

NGDAX

14.43

3.20

14.43

15.05

  

SunAmerica Focused Dividend Str A

FDSAX

14.33

6.15

14.33

11.57

11.46

American Beacon Mid Cap Value A

ABMAX

14.00

4.42

14.00

12.19

  

Dreyfus Equity Income A

DQIAX

13.41

4.86

13.41

9.91

7.07

Lord Abbett Fundamental Equity A

LDFVX

13.37

4.26

13.37

15.18

6.88

RS Large Cap Alpha Fund A

GPAFX

13.38

4.68

13.38

15.41

5.65

Hotchkis And Wiley Large Cap Value A

HWLAX

13.32

5.82

13.32

16.81

4.14

Highmark Equity Income A

NJPAX

13.35

4.40

13.35

11.03

6.14

Growth/Income Objective Group

  

10.09

3.53

10.09

10.43

4.74

  

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