The Investment Company of America®
Outpacing the Index in the Long Term
In the 20-year period ending 12/31/2015, The Investment Company of America® (ICA) beat its benchmark, the Standard & Poor’s 500 (S&P) Index. Although there have been periods when the fund lagged, thanks to a risk-sensitive approach, the fund produced greater wealth than an index investment during this volatile 20-year period.
An initial investment of $10,000 would have grown to:
All dollar amounts are based on a hypothetical investment of $10,000 on 12/31/1995. Total returns are based on the 20-year period from 12/31/1995 to 12/31/2015.
GRAY: Hypothetical index investment
BLUE: Investment with low downside capture
Resilient in Significant Downturns
Let’s take a look at how low downside capture affected the fund’s results during two key market downturns.
Post-Tech Bubble Downturn*
Following the bursting of the tech bubble, the economy suffered a huge blow, and the S&P 500 index lost 47.4% of its total value. But with a lower downside capture ratio, The Investment Company of America lost just 28.3% of its value, avoiding much of the crash. While the fund trailed the index going into the downturn, it emerged in the lead.
Financial Crisis Downturn†
The financial crisis of late 2007 left the S&P 500 Index with a 55.3% loss, while The Investment Company of America lost 50.9% of its value. Going into this downturn, the fund had a 17.5% advantage over the index, and thanks to low downside capture, that advantage grew to 29%.