capital appreciation fund
An aggressive type of mutual fund that seeks profit primarily through investment in growth stocks.
Implicit in this heavy focus on growth stocks is a high level of risk. When successful, revenue reaches shareholders through investment in companies with rising share prices. This kind of fund is exactly the opposite of income or dividend funds, through which investment is mostly directed toward companies that pay shareholders a dividend. They also differ in that interest income is taxed more steeply than capital gains.
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