Larger-capitalization growth stocks rallied in the first quarter of 2013, and several of the major market indexes set all-time highs. Stocks advanced against a backdrop of steady, albeit modest, economic expansion and the Federal Reserve's asset purchase program, which helped keep interest rates low and stimulate growth. Merger and acquisition activity buoyed investor sentiment. However, sentiment was tempered at the end of the period by concerns that the European debt crisis could flare up again. Although every sector in the S&P 500 Index advanced, defensive sectors, including health care, consumer staples, and utilities, performed the best, while information technology and materials stocks generated far less robust gains.
The New America Growth Fund returned 8.32% in the quarter compared with 10.61% for the S&P 500 Index and 9.77% for the Lipper Multi-Cap Growth Funds Index. For the 12 months ended March 31, 2013, the fund returned 9.24% versus 13.96% for the S&P 500 Index and 9.65% for the Lipper Multi-Cap Growth Funds Index. The fund's average annual total returns were 9.24%, 8.12%, and 10.01% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2013. The fund's expense ratio was 0.81% as of its fiscal year ended December 31, 2011.
For up-to-date standardized total returns, including the most recent month-end performance, please click on the Performance tab, above.
Current performance may be lower or higher than the quoted past performance, which cannot guarantee future results.
Share price, principal value, and return will vary and you may have a gain or loss when you sell your shares.
Benchmark Definitions
We remain committed to our bottom-up stock selection process and made only modest shifts to the portfolio's sector allocations. We want to own companies that can grow organically and generate steady earnings and cash flow growth, especially firms that are not dependent on economic growth to perform well. The portfolio's largest allocations are in companies that generate durable growth in the information technology, health care, and industrials and business services sectors. Conversely, we have minimal allocations to slower-growth segments including utilities, telecommunication services, and consumer staples. With the help of our dedicated team of research analysts, we are finding what we think are good investment opportunities in undiscovered and out-of-favor stocks.
The U.S. stock market is showing its resilience, thanks in large part to the Fed's easy money policies. We believe that monetary policy decisions will determine how stocks perform over the remainder of 2013. However, one of our primary concerns is that long-term global growth could be challenged if governments around the world do not shrink their fiscal deficits and rein in their growing debt burdens. Since growth tailwinds are unlikely to be strong, we are looking for value in growth stocks that generate steady recurring revenues. We favor companies that are committed to expanding profit margins, innovating new products and services, and deliver shareholder value by deploying cash wisely.
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