Strategies for Growth Investing Without Overspending
Active managers have found it challenging to distinguish themselves in the growth investing arena. The soaring stock prices of key index players, often referred to as the Magnificent Seven—which includes companies like Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—are prompting executives to rethink how they perceive market dynamics. However, there are various strategies for achieving success in investing, and many don’t hinge on just a select few high-flying stocks. Here are three funds that are focused on growth stocks while avoiding overvaluation.
MFS Massachusetts Investors Growth Stock has a strong reputation for maintaining valuation discipline. This fund carries a Morningstar Medalist Bronze rating and aims to invest in resilient growth companies that can soften the blow during sharp market downturns. While it includes well-known stocks like NVIDIA and Apple, it limits its exposure to reduce the risk associated with significant deviations from the index. As of September 2025, the top 10 stocks in the Russell 1000 Growth Index made up 61% of that index, but this fund allocated just 32% of its assets to these companies, holding only four of the top ten. It underweighted or completely missed positions in Amazon, Meta, Tesla, and occasionally Apple and Nvidia, which contributed to a lackluster average return of 10.9% over five years until November 2025.
Nonetheless, the fund’s ability to limit losses proved advantageous for investors. In 2022, when the index and average competitors dropped nearly 30%, this fund only fell by 19%. It performs relatively well in adhering to Warren Buffett’s foundational investment advice: “Don’t lose money.”
For those who are comfortable with a more concentrated sector approach, T. Rowe Price Growth Stock (also Bronze-rated) might be of interest. Under manager Jim Stillwagon, the focus is on businesses with strong competitive advantages that are fairly priced based on their financial fundamentals. He isn’t shy about making confident choices. As of October 2025, a significant 73% of the portfolio was in the top 10 stocks, with several positions exceeding 10%. The fund faced a tough year with Stillwagon’s predecessor, dropping 40% due to underweights in major constituents like Apple and Tesla, compounded by economic challenges in 2022. Since Stillwagon took over in August 2025, he has employed a similarly thorough research approach, blending stable stocks with fast-growing companies. Following a strong 2023 performance, the fund’s results have aligned more closely with its peers. However, its one-year return of 16.4% through November 2025 still fell short of the median in the fast-growing category.
Loomis Sayles Growth (Silver Rated) may not be viewed as contrarian given its strong record, but its methodology indeed embraces a contrarian essence that doesn’t overly depend on index conformity. Manager Aziz Hamzaoglari along with his eight-member team adopts a patient, price-conscious investment strategy, focusing on companies that show consistent free cash flow growth. Recent choices demonstrate this price discipline, as the team once viewed Meta and Tesla as overpriced but later added both to the portfolio in 2022, making them pivotal positions by September 2025. The same cautious but opportunistic strategy applied to Boeing and Nike, with investments made during the pandemic-related market downturn. The fund has a position cap of 8%, increasing to 10% in 2024, and, with the Russell 1000 Growth Index becoming increasingly concentrated, the team has successfully managed a diverse range of stocks. This approach has allowed the fund to deliver annual returns of 15% over the five years ending in November 2025, outperforming about 75% of its peers in the large-cap growth market.
