Investing in your 20s? These top growth funds could help you retire earlier

If you're in your 20s and already putting money away for retirement, congratulations. You're giving yourself a great shot at achieving financial freedom. Given that many people don't think about saving for retirement until it's too late, you're definitely ahead of the game.

In your 20s, you're likely to be in the accumulation phase of the investor lifecycle. In this phase, you can afford to take on a little more risk and allocate a proportion of your capital to high-growth investments such as technology firms or small-cap companies. Such investments are more risky than blue-chip FTSE 100 companies, yet risk is related to reward, and with 20, 30 or 40 years until retirement, there's plenty of time to ride out volatility.

With that in mind, today I'm looking at two high-growth mutual funds that could be suited to investors in their 20s. Both are higher-risk, yet have the potential to generate strong long-term returns.

Polar Capital Global Technology

If you're interested in investing in technology, check out the Polar Capital Global Technology fund, which aims to achieve 'above average' capital growth by investing in a globally diversified portfolio of technology companies. This fund has been an outstanding performer in recent years, returning 92% and 191% over three and five years respectively, and topping Hargreaves Lansdown's list of technology funds over those time periods.

A glance at the portfolio reveals some familiar names. The top five holdings currently include Microsoft, Apple, Facebook and Alphabet (Google) C and A class shares.

Technology is an exciting sector to invest in right now, given the pace of technological development in recent years. For those with a 10+ year investment time horizon, I think this fund has significant investment potential. The net ongoing charge is 1.15% per year through Hargreaves Lansdown.

Jupiter UK Smaller Companies

Boutique asset manager Jupiter has grown to be one of the UK's most successful investment management groups, having gained a reputation for outperforming across a broad range of asset classes and investment strategies.

The firm's UK Smaller Companies fund is one fund that has performed very well in recent years. Its objective is to obtain long-term capital growth by investing in smaller companies that have significant growth potential. Over three and five years, it has returned 94% and 151% respectively.

Portfolio manager James Zimmerman prefers to invest in companies that are in a strong financial position and in which management own a significant stake. Currently, the top five holdings here currently include Frontier Developments, Northern Trust GBP Fund Class D, Games Workshop Group, Everbridge and Trupanion.

Smaller companies can generate powerful returns over the long term, and as such, this fund looks well suited to those with a multi-decade investment horizon. Ongoing charges are 1.02% through Hargreaves Lansdown.

Investing in your 20s can have huge implications for your wealth later in life. Allocate some of your capital to high-growth investments now, and you may have the freedom to retire much earlier than you originally planned.

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Edward Sheldon has no position in any shares mentioned. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. The Motley Fool UK owns shares of and has recommended Alphabet (C shares), Apple, and Facebook. The Motley Fool UK has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.