4
Morningstar Analyst Rating
07-17-13
´
Morningstar Pillars
Process
Performance
People
Parent
Price
Positive
Positive
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
40.60
34.35
28.73
30.44
27.33
20.48
34.01
32.87
30.86
27.38
24.54
18.47
Total Return %
18.20
20.54
-4.89
12.28
34.48
-39.07
10.95
10.94
14.23
11.95
32.90
-22.02
+/-S&P 500
-1.42
4.54
-7.00
-2.78
8.02
-2.07
5.46
-4.85
9.32
1.07
4.22
0.08
+/-Russ 1000Gr
0.47
5.28
-7.53
-4.43
-2.73
-0.63
-0.86
1.87
8.97
5.65
3.15
5.86
Income Return %
0.00
0.99
0.72
0.90
1.03
0.69
1.09
0.89
0.69
0.37
0.03
0.08
Capital Return %
18.20
19.55
-5.61
11.38
33.45
-39.76
9.86
10.05
13.54
11.58
32.87
-22.10
Total Rtn % Rank Cat
36
7
73
77
49
39
64
17
7
16
18
15
Income $
0.00
0.28
0.22
0.25
0.21
0.23
0.36
0.27
0.19
0.09
0.01
0.02
Capital Gains $
0.00
0.00
0.00
0.00
0.00
0.00
2.06
1.10
0.23
0.00
0.00
0.00
Expense Ratio %
.
0.71
0.68
0.69
0.75
0.62
0.62
0.63
0.66
0.70
0.76
0.75
Income Ratio %
.
0.66
0.67
0.76
1.00
1.09
0.94
0.89
0.76
0.20
0.28
0.18
Turnover Rate %
.
18
34
33
38
32
26
22
20
19
25
30
Net Assets $mil
60,766
55,970
53,225
66,101
66,117
52,596
91,391
83,868
73,623
60,323
48,074
31,104
Performance
07-31-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-4.00 16.73 13.38 5.85 34.48
4.17 -11.70 10.70 10.26 12.28
5.29 -0.69 -16.21 8.55 -4.89
14.58 -4.19
7.36 2.28 20.54
8.56 3.14
. . .
Trailing
Total
+/-
+/- Russ %Rank Growth of
Return% S&P 500 1000Gr
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
7.04 0.94
1.80
38 10,704
13.12 -0.61
0.23
32 11,312
28.68 3.68
7.04
12 12,868
15.91 -1.83
-2.09
52 15,573
6.72 -1.54
-2.29
58 13,843
8.37 0.73
0.68
24 22,340
8.06 3.40
4.57
5 31,987
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
13.39
79
0.23
61
5.18
75
0.27
66
7.32
37
0.38
69
Potential Capital Gain Exposure: 43% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
21.28
3 Yr
13.65
-Avg
-Avg
5 Yr
5.46
-Avg
-Avg
10 Yr
7.73
Avg
-Avg
Incept
13.49
Other Measures
Standard Index
Best Fit Index
S&P 500
R3000
Alpha
-2.3
-1.9
Beta
1.05
1.00
R-Squared
96
97
Standard Deviation
14.32
Mean
15.91
Sharpe Ratio
1.10
Morningstar’s Take
by Flynn Murphy 07-17-13
A proficient team gives American Funds Growth Fund
of America an edge.
Eleven managers run sleeves of the fund, drawing
on American’s experienced analysts to pick stocks (the
analysts also run a sleeve). The managers take
different approaches, buying traditional growth fare,
cyclical names, and firms beset by troubles the
managers deem temporary.
Four veteran managers have stepped down from
this fund since 2011, including James Dunton, who
retired in June 2013 after 28 years. But the team is
well prepared for turnover. The firm has a solid track
record of grooming analysts to step into manager roles.
Plus, the remaining managers average 11 years at the
fund, making them a more experienced bunch than the
typical large-growth manager.
That experience has translated into positive
risk-adjusted returns. The fund’s 7.8% annualized
return in the trailing 11 years through June 2013 beats
the Russell 1000 Growth Index’s 7% and the category’s
5.9% return. The fund has also outpaced both the bogy
and the category since the 1988 start date of its
longest-tenured manager, James Rothenberg. Those
returns came with a smoother ride: The fund typically
gained about as much as its benchmark and peers in
rising markets but held up better in bear markets.
Strong performance drew heavy investor inflows in
the mid-2000s, which has raised some concerns. Its
assets peaked in 2007, but it still stands as the
biggest large-growth offering with roughly $120 billion
in assets. That’s nearly 4 times its size in mid-2002.
With so many assets in tow, the fund’s managers have
struggled to distinguish the fund from its Russell 1000
Growth benchmark. The fund’s active share--a
measure of the portfolio’s divergence from the
bogy--dropped to 65% in 2013 from 75% in 2002.
Other correlation metrics, such as tracking error and
R-squared, also show the fund’s returns have looked
increasingly like its benchmark since 2002.
The fund’s size may make it harder to outperform
peers and the index, but capable management, low
volatility, and a cheap price tag still work in its favor.
Address:
The Growth Fund of America, Inc.
San Francisco, CA 94105-1409
800-421-4225
Web Address:
Inception:
11-30-73
Advisor:
Capital Research and Management Company
Subadvisor:
None
NTF Plans:
Federated Tr NTF, Schwab Instl NTF
Minimum Purchase:
$250
Add: $50 IRA: $250
Min Auto Inv Plan:
$250
Add: $50
Sales Fees:
5.75%L,
Management Fee:
0.50% mx./0.23% mn., 0.01%A
Actual Fees:
Mgt:0.28% Dist:0.24%
Expense Projections:
3Yr:$789
5Yr:$947 10Yr:$1407
Income Distribution:
Annually
Data through July 31, 2013
American Funds Growth Fund of Amer A
Ticker
Status Yield Total Assets
Mstar Category
AGTHX Open
0.7% $120,084 mil
Large Growth
88% 89% 83% 84% 90% 93% 90% 90% 92%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 07-13
Historical Profile
Return
Risk
Rating
Average
Below Avg
Neutral
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
S&P 500
Performance Quartile
(within Category)
History
10.0
7.0
12.5
15.0
18.0
Portfolio Analysis
06-30-13
Share change since 03-13 Total Stocks:278 Sector
PE Tot Ret% % Assets
Amazon.com Inc
Cnsmr Cyc
.
20.07 3.83
Gilead Sciences Inc
Hlth care 34.5 67.19 3.80
Google, Inc. Class A
Technology 26.5 25.50 3.62
Home Depot, Inc.
Cnsmr Cyc 25.1 29.04 2.72
SOFTBANK Corp
Comm Svs 24.6 76.44 1.83
Microsoft Corporation
Technology 12.4 20.93 1.80
EOG Resources
Energy
53.2 20.90 1.72
Philip Morris Internatio
Cnsmr Def 17.0 8.66 1.60
UnitedHealth Group Inc
Hlth care 14.2 35.22 1.57
Comcast Corp Class A
Comm Svs 19.0 21.71 1.45
Nike, Inc. Class B
Cnsmr Cyc 23.4 22.75 1.35
Costco Wholesale Corpora
Cnsmr Def 25.4 19.52 1.25
Oracle Corporation
Technology 14.3 -2.55 1.20
Union Pacific Corp
Industrl
18.1 27.24 1.17
21st Century Fox Class A
Cnsmr Cyc 11.9 35.20 0.97
Allergan, Inc.
Hlth care 31.6 -0.56 0.92
Crown Castle Internation
Comm Svs 133.3 -2.65 0.87
Intuitive Surgical, Inc.
Hlth care 22.6 -20.88 0.87
Express Scripts
Hlth care 29.3 21.39 0.83
Noble Energy Inc
Energy
21.9 23.36 0.81
Current Investment Style
Market Cap %
Giant
45.8
Large
38.8
Mid
15.1
Small
0.2
Micro
0.0
Avg $mil:
42,364
Value Blnd Growth
Large Mid Small
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
17.31
2.62
1.59
9.22
1.29
0.97
0.91
0.88
0.92
0.98
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
13.57
7.74
0.98
8.13
4.82
1.01
0.74
0.12
0.63
0.22
Profitability
% Rel Category
Return on Equity
Return on Assets
Net Margin
16.74
7.70
12.20
0.80
0.79
0.86
Sector
Weightings
% of
Stocks
Rel
S&P 500 High
3 Year
Low
Cyclical 30.33 1.05
BasicMat 2.67 0.87 8 3
CnsmrCyc18.44 2.15 18 12
FinanSvs 8.96 0.57 11 9
Real Est 0.26 0.18 0 0
Sensitive 45.85 1.05
CommSrvs 6.75 1.68 8 6
Energy 11.59 1.08 13 11
Industrl
9.01 0.79 13 9
Technlgy 18.50 1.05 22 17
Defensive23.81 0.86
CnsmrDef 5.51 0.45 7 5
Hlthcare 18.30 1.55 18 11
Utilities 0.00 0.00 0 0
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash
7.2
Stocks 91.6
Bonds 0.2
Other
1.0
Foreign 17.4
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2013Morningstar, Inc.All rights reserved. The information herein is not represented orwarranted to be accurate, correct, complete or
timely. Pastperformance isno guarantee of future results.Access updated reports at
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mfb.morningstar.com.
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