Summary: Use a mutual fund screener to create your own, customized short list of the best large cap growth funds.
By: Robert F. Abbott, freelance writer and author of Big Macs & Our Pensions
. From the top, we have:
- 3 Year Total Return: set to 14%; this includes capital gains and dividends, if any;
- Load: N; this refers to whether or not we want to see front-load or back-load funds, to which the answer is No;
- Objective Description: refers to the type of fund, in this case Large Cap Growth; and
- Sharpe Ratio: a measure of how much risk is involved in achieving a particular level of return; most meaningful when used as a comparison. For more information on this very useful metric, see my article, Connecting Mutual Fund Risks & Rewards with the Sharpe Ratio.
You can, and probably should, tweak these criteria to meet your own investing needs and your risk tolerance. For example, you might want to minimize risk; to do that you would increase the Sharpe Ratio and be prepared to accept a lower total return. You can read more about doing your own screens at Mutual Fund Screener.
As I said above, the large cap growth mutual funds on the screener are not recommendations; they are used as an example of the power of screening.
Finally, once you have a short list of some of the best large cap growth funds, normally a dozen or fewer funds, you can investigate them in more detail to ensure you know what you’re getting with each of them, and whether or not they’re right for you. Don’t hesitate to keep adjusting the criteria on the screener until you get exactly what you want.