Growth stocks are on sale. Near the end of May, growth indexes were down about 30% year to date. There are two main reasons for this: One, rising interest rates, and growth stocks had also gotten very frothy, as evidenced by meme stocks, SPACs, and generally steep valuations. If you're still building your portfolio that’s good news. It means returns from investments you make today will be higher. But we don’t know when the growth stock bear market will end.
Here are three excellent growth funds to consider.
In large growth, I like Gold-rated Harbor Capital Appreciation HACAX. It’s run by a deep team at Jennison and it gives you exposure that’s not too hot or not too cold. The idea is simply to find great growth companies poised for even more growth, so the top names are very familiar names like Amazon.com AMZN, Alphabet GOOG, Microsoft MSFT, and Tesla TSLA.
In mid-caps, I like T. Rowe Price Mid Cap Growth RPMGX. This Gold-rated fund reopened to new investors in December 2021. Brian Berghuis is one of the best growth managers around and T. Rowe has some of the best healthcare and tech analysts. The one reservation I have here is the fund has a $30 billion asset base, so obviously its not going to be real nimble.
In small-caps, there’s Loomis Sayles Small Cap Growth LCGRX. The fund looks for good growth potential in overlooked reasonably priced names. On the other hand, they have a momentum component that spurs them to sell falling stocks or buy stocks on the rise. You have a good mix of risk and reward there. It’s an appealing mix that has led to consistent performance.