Growth and income mutual funds

Just as the name suggests growth and income mutual fund has two main objectives, these are growth and income generation. The growth stock fund usually maintains that part of the stock, which is expected to grow at a faster rate in comparison to the stock market. Income stock fund are usually similar and interchangeable with value fund, which investors believe are selling at a low price in relation to the earning of this fund.

It is worthy to note that the income portion of growth and income objective does not limit the fund to income generating stock. The income objective of this fund can be achieved through fixed income instrument. This includes the like of bonds.

Growth and income fund usually offers a way through which investors can buy units of this fund and acquire share of publicly traded companies. In most cases, diversified portfolio of stocks and other investment usually gives the necessary potential despite the market condition for the growth of your investment.

The price of one unit is usual calculated on a daily basis and this is usually based on the value of securities of the fund on that day. Depending on the nature of the investment in the fund opportunities in the market, the fund’s value fluctuate in value more than the initial invested amount. It is however important to note that capital invested more than three years is guaranteed. Price guarantee usually protects an invest from losses. This guarantee usually come to play when a unit has been held for at least three year from when it was purchased. The investor can never acquire less than what was paid for a unit. This is even if the unit is selling for less amount at the time of investment

Investors can track the performance of their investment daily as this rates are published on a daily basis. There is usually an offer price and bid price. The offer price is the purchasing price for the unit. The bid price is the price at which one is selling this unit.

Units can also be distributed. These distributions are usually paid twice a year and are based on the unit holding on 30 June and 31 December. The total return you earn is the capital appreciation in price of the unit purchased plus the price for the distribution over this period.

There are different examples of growth and income funds. Some include Calamos growth and income, which specifically invest in convertible bonds, Vanguard growth and income, which invest in growth stocks and value stocks. It has no exposure to bonds.

When purchasing these funds you should consider

Asset allocation


Risk and return


Distribution frequency