When capital appreciation over the long term takes precedence over dividend payouts, growth funds become a natural choice for investors. These funds focus on realizing an appreciable amount of capital growth by investing in stocks of firms whose value is projected to rise over the long term. However, a relatively higher tolerance to risk and the willingness to park funds for the longer term are necessary when investing in these securities. This is because they may experience relatively more fluctuations than other fund classes.

Below we will share with you 5 top rated growth mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.  To view the Zacks Rank and past performance of all growth funds, investors can click here to see the complete list of funds.

Transamerica Focus A (IALAX) seeks capital appreciation over the long term. The fund invests in companies whose market cap lies within the bounds of the Russell 1000 Growth Index. A maximum of 25% of its assets may be utilized to purchase foreign securities. The growth mutual fund has a three year annualized return of 12.7%.

The growth mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.55% compared to a category average of 1.27%.

Westcore MIDCO Growth (WTMGX) primarily invests in stocks of medium-sized companies with significant growth potential. The majority of its assets are invested in mid-cap companies with market capitalizations similar to those included in the Russell Mid-cap Growth index. The growth mutual fund has a three year annualized return of 9.94%.

As of August 2012, this growth mutual fund held 62 issues, with 2.67% of its total assets invested in Onyx Pharmaceuticals, Inc.

Legg Mason ClearBridge Large Cap Growth A (SBLGX) seeks long-term capital appreciation. The majority of the fund’s assets are utilized to purchase equity securities or instruments with similar features. The companies invested in must be identical to those included in the Russell 1000 Growth Index. The growth mutual fund has a three year annualized return of 12.62%.

Peter Bourbeau is the fund manager and he has managed this growth mutual fund since 2009.

Hennessy Cornerstone Growth (HFCGX) invests in common stocks of growth oriented companies. The fund selects 50 stocks using the Cornerstone Growth Strategy, a quantitative formula. It invests 2% of the portfolio’s assets in each of these 50 stocks. The growth mutual fund has a three year annualized return of 11.13%.

The growth mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.33% compared to a category average of 1.35%.

John Hancock U.S. Global Leaders Growth A (USGLX) seeks long-term capital appreciation. The majority of the fund’s assets are utilized to purchase common stocks of firms of large cap companies. A maximum of 20% of its assets are invested in foreign firms and prominent, large cap foreign issuers. The growth mutual fund has a three year annualized return of 15.81%.

George P. Fraise is the fund manager and he has managed this growth mutual fund since 2000.

To view the Zacks Rank and past performance of all growth mutual funds, investors can click here to see the complete list of funds.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.