Larger-capitalization growth stocks registered modest first-quarter gains. Despite some large daily swings, stocks roughly traced a V-shape in the quarter, declining through the middle of February and then rising for the remainder of the period. Gains in the second half of the quarter offset earlier losses for the large-cap benchmarks. The technology-heavy Nasdaq Composite ended the quarter with modest losses, however. Sector performance was widely dispersed. The small utilities and telecommunication services segments within the S&P 500 recorded strong gains. Consumer staples, industrials and business services, energy, and materials shares also performed well. The health care and financials sectors performed poorly, however, falling more than 5%. The rebound in commodity prices and energy and materials stocks helped value stocks outperform growth shares.
The New America Growth Fund returned −4.79% in the quarter compared with 1.35% for the S&P 500 Index and −3.90% for the Lipper Multi-Cap Growth Funds Index. For the 12 months ended March 31, 2016, the fund returned −2.08% versus 1.78% for the S&P 500 Index and −5.29% for the Lipper Multi-Cap Growth Funds Index. The fund's average annual total returns were −2.08%, 10.68%, and 8.64% for the 1-, 5-, and 10-year periods, respectively, as of March 31, 2016. The fund's expense ratio was 0.79% as of its fiscal year ended December 31, 2015.
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 largest allocations are in growth-focused sectors, including information technology, health care, and consumer discretionary. Stock selection, especially in the consumer discretionary, health care, and information technology sectors, hurt the portfolio's comparison with the benchmark. To a lesser extent, allocation decisions detracted, although an underweight to financials and an overweight to information technology were positive relative performance contributors.
Although 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. 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. As well as being less dependent on high commodity prices, if not even benefiting from lower ones, faster-growing companies in areas such as consumer discretionary and information technology are often less reliant on the business cycle and should fare better if economic growth moderates in 2016. The portfolio's core holdings are invested in "all-seasons" growth companies, those with solid fundamentals and the ability to grow earnings organically.