American Century Newton Growth Fund

^#31 in Large Growth

U.S. News evaluated 473 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 8.42 percent over the past year, 11.07 percent over the past three years, and 5.43 percent over the past five years.

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Summary

American Century NT Growth is still relatively young, but its results are promising.

As of May 03, 2013, the fund has assets totaling almost $842.10 million invested in 119 different holdings. Its portfolio consists primarily of shares of large companies.

This fund launched in 2006, so its track record is still somewhat untested. Still, in its short existence, it's had to deal with a wide variety of market conditions, and the results are encouraging. At the end of May, the fund completed its first five-year period, and during that time, it landed in the top 13 percent of Morningstar's large-growth category. Overall, the fund's approach is rather cautious. Notably, roughly 85 percent of its portfolio is invested in large- and mega-cap companies. The "NT" stands for no tobacco; the fund cannot invest in any tobacco companies. 

Toward the beginning of 2011, management enthusiastically put some of the fund's assets to work, upping its positions in virtually all of the team's favorite companies and initiating positions in some new ones, including General Electric. With more than 100 holdings in the portfolio, no one name dominates. The fund's largest positions are in ExxonMobil and Apple, each of which accounts for upwards of 4 percent of assets. Management isn't afraid to actively trade, and the fund's turnover ratio currently sits at 95 percent. By comparison, a fund that replenished all of its holdings once a year would have a ratio of 100 percent. The fund has returned 8.42 percent over the past year, 11.07 percent over the past three years, and 5.43 percent over the past five years.

Investment Strategy

According to the fund's prospectus: "The portfolio managers look for stocks of companies they believe will increase in value over time. In implementing this strategy, the portfolio managers make their investment decisions based primarily on their analysis of individual companies, rather than on broad economic forecasts. Management of the fund is based on the belief that, over the long term, stock price movements follow growth in earnings, revenues and/or cash flow." 

Role in Portfolio

The fund can lend support to a well-balanced portfolio.

Management

E. A. Prescott LeGard and Gregory Woodhams manage the fund.

Fees

American Century Newton Growth Fund has an expense ratio of 0.77 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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