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Projected Earnings Growth

This figure represents the projected one-year earnings growth rate of the stocks held by a fund.

Projected earnings growth gives a good picture of a company's growth projects. All things being equal, stocks with better growth prospects are more desirable than those with poorer growth rates.

Morningstar aggregates projected earnings growth figures for mutual funds using a median methodology, whereby domestic stocks are ordered from highest to lowest based on their projected earnings growth. One adds up the asset weighting of each holding until the total is equal to or greater than half of the total weighting of all domestic stocks in the fund. The projected earnings growth rate for that stock is then used to represent the projected one-year earnings growth rate of the total portfolio.

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