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Stock selection has made the difference in Growth Fund

Jim Rothenberg
Portfolio manager
Based in:
Los Angeles
Investment experience:

KEVIN CLIFFORD: Jim, I want to talk about The Growth Fund of America, probably the fund you’ve been most closely associated with over your career. And again, we’re here in early December. The fund’s had a spectacular year. Your thoughts?

JIM ROTHENBERG: The first thought is that, really, what has driven Growth Fund this year has been stock selection. We’ve just done a very good job in Growth Fund of getting a lot of significant names correct — and not many problems — and it shows. And so we’ve done exceptionally well this year.

The perennial issue with Growth Fund of America is size, and it’s one of these strange discussions that you go into; it almost doesn’t matter what level the fund is. So today it’s $110 billion, give or take a little bit, in size, which makes it very large. It was as big as $200 billion in size. And by the way, on the way from about $150 to $200 billion, it did exceptionally well. It had a problem in the 2008–09–10 period; seems to be rebounding from that, starting to do well again.

It’s not the first time we’ve ever had a few years where we weren’t quite in sync. We had one in the 1990s, and I can remember some others in the past.

What I tend to come back to is that I look at our research capabilities; I look at the type of people — the quality of the people — we have; I look at the investment team that we have fielded on Growth Fund of America, as well as many of the other funds. And it’s just an exceptionally talented group of people.

So that makes me very optimistic that whatever the issues were — some of the hangovers from non-U.S. investing in Growth Fund a bit and some of the stock-selection problems that we had before — we’ve gotten past that; we seem to be doing well. But as always, the proof will be in the pudding out there in a couple of years to see if we can continue to do well. 

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