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What is the basic difference between a Value mutual fund and a Growth mutual fund?


Keep it short and simple. Thanks!

Different strategies. Growth funds look for smaller companies they feel are going to take off. Higher potential return, but higher risk as well. Value funds look for companies whose stock prices are lower than the value of the company divided by the number of stocks, regardless of size or growth potential. Value funds are typically more stable over the long haul, but don't provide the upper potential of growth funds.

oGrowth funds invest in the stock of companies whose profits are growing at a rapid pace.
oValue funds buy companies that appear to be cheap, relative to their earnings.

http://www.personalfinance101.org/?utm_s...

A Value fund pays higher dividends

A Growth fund pays lower dividends but the stock (or share price) is suppose to increase.

The Growth one is riskier and generally offers higher rewards. However the risk of not making the reward is higher.

The Value is lower risk but safer. Your rewards are more likely to happen but be lower.

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