Major bourses posted gains during the month of January. But, the stock market entered correction territory in February due to high inflationary expectations. Stocks further suffered in March due to President Trump’s tariff policies and plunge among tech stocks, which occurred due to certain company-specific issues. However, strong consumer and business sentiments, and a robust labor market helped curb losses towards the end of the first quarter.

Moreover, the U.S. economy’s aggregate productivity of goods and services topped expectations in the first quarter, sustaining hopes of solid recoil for the rest of the year. Banking on such positive vibes, addition of mutual funds with stunning growth potential to your portfolio could prove to be lucrative. Aggressive growth funds are considered one of the best investment options for investors with a high-risk appetite in search of optimum capital appreciation.

Taking cue from such developments on the economic front, we present the five best aggressive growth mutual funds from Q1.

U.S. Economy in Q1

U.S. GDP growth for the first three months was reportedly the highest for any first quarter since 2015. At full employment, the economy is presently showcasing remarkable strength in both business and consumer confidence. Also, signs of robust economic momentum are most likely to bolster infrastructure spending in the United States.

On Apr 27, the Bureau of Economic Analysis (BEA) reported that U.S. GDP growth rate was 2.3% for the January-March period, better than the 2% gain predicted by analysts.

In the last four quarters, GDP growth rate averaged 2.9%, almost in line with 3% growth predicted by the Trump administration. However, the American economy slightly slowed in the three months ended March. This has been largely attributed to a decline in consumer spending.

Aggressive Growth Funds

Given such favorable conditions, investors seeking a high level of capital growth should look no further than investing in aggressive growth mutual funds. These funds invest in companies that show high growth potential, but this comes with the risk of share price fluctuation. This category of funds also invests heavily in undervalued stocks, IPOs, and relatively volatile securities and seeks to profit from them in a congenial economic climate. The securities are selected on the basis of a company’s potential for growth and profitability.

Buy These 5 Best Performing Aggressive Growth Funds

Aggressive growth funds generally invest in small- and mid-cap companies with ample scope to grow over time. The five best-performing aggressive growth mutual funds in the first quarter of 2018 that we have highlighted also carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have provided encouraging returns in the first quarter of 2018. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds.

JPMorgan Small Cap Growth A (PGSGX - Free Report) invests a huge portion of its assets in securities of small-capitalization companies. PGSGX seeks long-term capital growth primarily from a portfolio of equity securities of small-capitalization and emerging growth companies.

PGSGX has an annual expense ratio of 1.24%, which is below the category average of 1.26%. The fund has returned 5.7% in the first quarter and sports a Zacks Mutual Fund Rank #1.

PRIMECAP Odyssey Aggressive Growth (POAGX - Free Report) seeks appreciation of capital in the long run. POAGX is invested primarily in the common stocks of U.S.- based companies, especially the ones which have the potential for high earnings growth. The fund may also invest in common stocks of companies from different market sectors.

POAGX has an annual expense ratio of 0.64%, which is below the category average of 1.21%. The fund has returned 11.5% in the first quarter and carries a Zacks Mutual Fund Rank #1.

USAA Aggressive Growth (USAUX - Free Report) seeks growth of capital. USAUX primarily invests in equity securities of domestic companies with large size market capitalizations. USAUX focuses on acquiring securities of companies that are believed to have above-average growth prospects. USAUX may also invest a maximum of 20% of its assets in securities of foreign companies including those from emerging markets.

USAUX has an annual expense ratio of 0.81%, which is below the category average of 1.10%. The fund has returned 2.2% in the first quarter and carries a Zacks Mutual Fund Rank #1.

T. Rowe Price QM US Small-Cap Growth Equity (PRDSX - Free Report) seeks capital appreciation over the long run. PRDSX invests lion’s share of its assets in securities of growth-oriented companies with small size market capitalization.

PRDSX has an annual expense ratio of 0.79%, which is below the category average of 1.24%. The fund has returned 2% in the first quarter and carries a Zacks Mutual Fund Rank #1.

Loomis Sayles Growth A (LGRRX - Free Report) invests in equities such as common stocks and warrants of large-cap companies. LGRRX may also invest, to a lesser extent, in small- and mid-cap companies. LGRRX invests in multiple sectors and industries.

LGRRX has an annual expense ratio of 0.91%, which is below the category average of 1.10%. The fund has returned 0.6% in the first quarter and carries a Zacks Mutual Fund Rank #2.