Build a Solid Base with Growth and Income Funds

Instead of trying to time market swings, long-term investors know that one of the best investment strategies is to stay invested in a diversified portfolio of quality investments. We believe that growth and income mutual funds (unit trusts) should be the foundation of your equity portfolio. That’s because they typically have helped buffer your portfolio when markets are down.

Growth and income funds may provide growth and income from underlying investments, such as shares and corporate or government bonds. In many cases, they invest in leading companies that are expected to grow at attractive rates and historically have paid dividends consistently.

Fewer Declines in Down Markets
On average, growth and income funds have less volatility than the FTSE All-Share. In addition, during the past 10 years these funds had a larger proportion of the gains than of the losses.* Adding these funds, therefore, may help you ride out short-term market volatility while also participating in rising markets.

Staying invested during volatile markets has historically been a successful strategy for long-term investors. We recommend you consider funds that have managers with proven track records, a solid investment philosophy and a focus on the preservation of capital and generating income returns across market cycles. Contact your Edward Jones financial adviser to help you select appropriate growth and income funds, if applicable to your situation.

Luisa A. Michel, CFA
Mutual Funds Research

*Sources: Morningstar, Bloomberg. The Growth and Income Composite was constructed using Morningstar listed OEICs that have a growth and income objective and have performance data since at least 31 Dec. 1997. The Growth and Income Composite cannot be invested in directly. The FTSE All-Share is an unmanaged index and cannot be invested in directly.