uploads///Portfolio Breakdown of the TWCGX

A Look at Portfolio Changes in TWCGX

David Ashworth - Author

May 31 2016, Published 3:36 p.m. ET

TWCGX overview

The American Century Growth Fund Investor Class (TWCGX) invests in companies that its managers believe will increase in value over time. Managers focus on large-capitalization companies and follow the bottom-up selection process.

The fund’s literature states that its growth team believes excess returns can be attained by investing in companies whose business fundamentals are improving. To identify such companies, fund managers employ analytical indicators such as accelerating earnings or revenue growth rates and increasing cash flows.

O’Reilly Automotive (ORLY), Lockheed Martin (LMT), Fiserv (FISV), Expedia (EXPE), and Perrigo Company (PRGO) were among the fund’s 87 holdings as of March 2016’s end. As of April, the fund was managing assets worth $7.4 billion.

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Portfolio changes in TWCGX

For this analysis, we will be considering the fund’s holdings as of March 2016, as that is the latest available sectoral breakdown. The fund’s holdings after March reflect valuation-driven changes to its portfolio, not its actual holdings.

Information technology, consumer discretionary, and healthcare form the core of TWCGX. Combined, these three sectors command 70% of the fund’s portfolio. Industrials and consumer staples are the only other two sectors with 10% or more of the fund’s assets invested in them. TWCGX is not invested in the telecommunications services or utilities sectors. It exited the telecommunications services sector completely in March 2016.

Both the consumer discretionary and consumer staples sectors form more of TWCGX’s portfolio than they did a year ago. However, compared to intrayear, the portfolio weight of the fund’s consumer discretionary stocks has fallen slightly. TWCGX’s exposure to the energy and industrials sectors has fallen from a year ago, while its exposure to the materials sector has increased.

The portfolio turnover of the fund is quite high, which means that the fund’s managers have not persisted with their holdings.

Has the fund’s unique positioning helped or hurt its performance in 2016? Let’s take a look in the next article.


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