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Analysis of the American Funds Growth Fund of America (AGTHX)

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Objective and strategy

The American Funds Growth Fund of America’s (AGTHX) investment objective is to provide growth of capital. The fund invests in value companies for long-term investment opportunities. As of August 31, 2015, AGTHX had total assets of $140.80 billion with investments across 270 companies.

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Performance Analysis

AGTHX returned -5.4% for the one-month period ended August 31, 2015. For the three-month period ended August, the fund fell 4.75%.

The return for the previous year ended August 31, 2014, was positive, with 2.33% returns. The annualized return for the five years ended August 2015 was 15.46%.

The American Funds Growth Fund of America (AGTHX) had a Sharpe ratio of 0.46, computed for the ten-year period ended August 31, 2015. The Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk.

Sectoral allocation

As of June 30, 2015, the American Funds Growth Fund of America’s (AGTHX) largest investments were in information technology, healthcare, and consumer discretionary, comprising 22.2%, 19.8%, and 18.4% of the fund, respectively. Financial and industrial sectors have exposures of 8.7% and 8.5%, respectively.

Large-cap stocks make up 83.9% of the portfolio, while mid- and small-cap stocks contribute 15.3% and 0.7% to the fund’s portfolio, respectively.

The top ten holdings for August 2015 show that the American Funds Growth Fund of America (AGTHX) is invested in Amazon.com (AMZN), Google (GOOGL), Gilead Sciences (GILD), and UnitedHealth Group (UNH), which make up 5.5%, 3.6%, 2.4%, and 1.9% of its holdings, respectively.

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