Larger-capitalization growth stocks drifted sideways for much of the quarter before Britain's vote to exit the European Union caused Wall Street to end the period on a note of marked volatility. Most of the major U.S. equity benchmarks recorded gains for the quarter, but the technology-laden Nasdaq Composite declined and added to its losses for the year to date. Sector performance within the large-cap S&P 500 Index varied widely. A partial rebound in oil prices helped the energy sector gain nearly 12%, and other value-oriented segments posted good gains. However, the growth-focused information technology and consumer discretionary segments recorded losses.
The New America Growth Fund - I Class returned 0.75% in the quarter compared with 2.46% for the S&P 500 Index and 0.95% for the Lipper Multi-Cap Growth Funds Index. For the 12 months ended June 30, 2016, the fund returned −1.78% versus 3.99% for the S&P 500 Index and −5.16% for the Lipper Multi-Cap Growth Funds Index. The fund's average annual total returns were −1.78%, 10.94%, and 9.25% for the 1-, 5-, and 10-year periods, respectively, as of June 30, 2016. The fund's expense ratio was 0.95% as of the most recent Prospectus.
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 and consumer discretionary, where we have significant overweight allocations versus the benchmark, and financials and health care, where we are modestly underweight. During the quarter, stock selection generated a positive contribution to returns versus the S&P 500, but sector allocations detracted. Our largest allocation shifts over the quarter were additions to health care and industrials and business services and reductions to our consumer discretionary and financials exposure. We selectively increased our allocation to growth companies that have somewhat defensive attributes and moderately decreased our holdings of stocks with later-cycle, economically sensitive characteristics.
The portfolio continues to be anchored by durable growth companies, those with the ability to increase revenues and earnings regardless of the global economic environment. We believe that, over the longer term, strong risk-adjusted returns most often arise from owning companies that are at the forefront of innovation and riding powerful, durable trends. Though we expect the U.S. economy to generate modest growth for the remainder of the year, we believe the global macro environment has become increasingly fragile. Against this backdrop, we will continue to rely on our fundamental research and bottom-up stock selection process, but at the margin, we are paying greater attention to downside risks in hopes of positioning your portfolio to hold up better in the event of an economic downturn.