Capital Growth

The term capital growth is used to define the profit incurred by investing or purchasing an asset.  Also, termed as capital appreciation, it is measured by the increase in its market price over the cost value. This is basically a long term investment of many mutual funds. Purchasing of portfolios with the objective of capital growth include mostly equities. However, the precise proportion of equities as compared to the total portfolios will vary in accordance to the investor’s financial constraints, tolerance of risk as well as the goals of investment.  Sometimes, an aggressive strategy of a portfolio is also used by an investor for maximizing capital growth, but they come with very high risks and consist mostly of equities. Basically, the capital growth portfolio includes 20 percent to 25 percent securities from fixed income, 65 percent to 70 percent from equities and the remaining amount in the form of cash or money market securities.

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Edited and Updated 31st May 2014

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