Larger-capitalization growth stocks registered solid fourth-quarter returns largely because of a powerful rally in October; stocks posted modest positive returns in November and losses in December. Leadership within the blue chip benchmark was narrow and dominated by a select few large-cap companies. The "FANGs"--Facebook, Amazon.com, Netflix, and Google (renamed Alphabet)--as coined by the Street, generated outsized fourth-quarter gains and propelled the market all year. The best-performing sectors in the benchmark (each up more than 9%) were materials, health care, and information technology. The lagging sectors (none declined) included energy, utilities, and consumer staples.
The New America Growth Fund returned 10.40% in the quarter compared with 7.04% for the S&P 500 Index and 6.06% for the Lipper Multi-Cap Growth Funds Index. For the 12 months ended December 31, 2015, the fund returned 8.80% versus 1.38% for the S&P 500 Index and 3.09% for the Lipper Multi-Cap Growth Funds Index. The fund's average annual total returns were 8.80%, 13.15%, and 9.54% for the 1-, 5-, and 10-year periods, respectively, as of December 31, 2015. The fund's expense ratio was 0.79% as of its fiscal year ended December 31, 2014.
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.
The portfolio invests in companies that we believe can generate above-average earnings and cash flow growth. Our bottom-up stock selection process focuses on companies that are not reliant on strong economic growth. The information technology, health care, and consumer discretionary sectors compose the lion's share of the portfolio and represent significant overweight allocations compared with the benchmark. Stock selection in the consumer discretionary and information technology sectors powered strong absolute and relative performance. However, stock selection and underweights in the materials and consumer staples sectors hurt our absolute and relative returns.
Although market volatility is likely to remain elevated, we remain optimistic about the longer-term outlook for our holdings. Based on our modest economic growth forecast, we expect the Federal Reserve to implement interest rate hikes at a measured pace in 2016 and possibly fewer times than the market currently expects. In our view, strong risk-adjusted returns most often arise from companies that are at the forefront of innovation and riding powerful, durable trends. Accordingly we look to own companies that can benefit from multiyear, secular trends within the growth stock landscape. We have opportunistically established new positions and added to holdings that we believe have been oversold. Our core holdings are invested in "all-seasons" growth companies--those with solid fundamentals and the ability to grow earnings organically.