5 things to know about The Growth Fund of America

CGGR

May 26, 2026

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1

A flexible approach to growth
 

  • The Growth Fund of America® (GFA) is principally focused on U.S.-based companies but can also invest selectively in companies outside the U.S.
  • The fund’s flexible approach allows managers to invest across different types of growth opportunities, including cyclicals and turnarounds.
  • This approach has produced a differentiated growth fund that has delivered strong returns without the concentration risk and rigidity of passive approaches.
Line chart compares the cumulative growth of a hypothetical $10,000 invested from 1987 to 2025 for The Growth Fund of America (GFA), the S&P 500 Index and the Russell 1000 Growth Index. All three rise over time, with GFA outperforming the indexes. By the end of the period, GFA reaches more than $1 million, 1.4 times as much as the Russell 1000 Growth Index, which ended at just over $745,000, and 1.7 times as much as the S&P 500 Index, which ended at just over $616,000.
2

Dynamic positioning
 

  • GFA’s sector positioning is an outcome of bottom-up security selection, not top-down sector calls or benchmark weights.
  • As managers gain or lose conviction in individual holdings, sector exposures naturally expand or contract, reflecting where research is uncovering growth opportunities.
  • This process has resulted in dynamic sector positioning over time, rather than static alignment with index sector weights.

Range of relative sector exposure vs. S&P 500 Index (%)

Chart showcases the range of relative sector exposure of The Growth Fund of America (GFA) versus the S&P 500 Index in all sectors including consumer discretionary, consumer staples, energy, financials, health care, industrials, information technology, materials, real estate, communication services and utilities. The vertical axis shows relative exposure ranging from negative 10% to positive 10%. For each sector, a shaded vertical bar indicates the highest and lowest relative exposure, a dashed line marks the average, and a dot shows the current exposure. Consumer discretionary and information technology show the highest average relative exposure, while financials shows the lowest average exposure. Other sectors display smaller positive or negative deviations around the S&P 500.

Source: Capital Group. Data from 12/31/15 to 12/31/25.

3

Diversified, not concentrated
 

  • GFA seeks to avoid the single sector and megacap concentration that has increasingly defined style-based growth benchmarks and the passive funds that track them.
  • This diversification spreads risk across the portfolio, reducing exposure to a narrow list of stocks.
  • As a result, the fund’s returns have been less dependent on top holdings than the indexes.*

Weight in top five holdings (%)

Horizontal bar chart compares the weight in top five holdings between the Russell 1000 Growth Index, the S&P 500 Index and The Growth Fund of America (GFA). The Russell 1000 Growth Index has the highest concentration, with 44.5% of assets in its top five holdings. The S&P 500 Index is at 30.2% while GFA is the lowest at 25.2%.

Source: Capital Group. As of 12/31/25.

4

Seeking growth, but not at any cost
 

  • GFA offers a similar expected growth profile to the Russell 1000 Growth Index but at meaningfully lower valuations based on price-to-earnings (P/E) ratios.
  • This gap suggests investors are paying less for each unit of expected growth, potentially improving the return profile if fundamentals play out.
  • Growth is pursued with valuation awareness — not index indifference.

Valuation metrics

Table displays the price-to-earnings ratio alongside the estimated 3- to 5-year earnings per share growth for The Growth Fund of America (GFA), the S&P 500 Index and the Russell 1000 Growth Index. GFA has a price-to-earnings ratio of 27.6 times and estimated earnings per share growth of 19.3%. The S&P 500 Index shows a lower price-to-earnings ratio of 24.7 times and estimated earnings per share growth of 12.8%. The Russell 1000 Growth Index has the highest price-to-earnings ratio of 33 times and estimated earnings per share growth of 20.2%.

Sources: Capital Group, Factset. As of 12/31/25.

5

A differentiated approach
 

  • Using a bottom-up approach, GFA has differentiated sector exposures compared to the S&P 500 and the Russell 1000 Growth indexes.
  • The fund has significantly smaller positions in technology companies relative to the Russell 1000 Growth and smaller relative to the S&P 500.
  • The fund has delivered diversification from extreme market concentration while breaking from conventional growth allocations.
Table compares sector allocations for the top The Growth Fund of America (GFA) holdings by sector versus the S&P 500 Index and the Russell 1000 Growth Index. Information technology represents 34.4% of the allocation in the S&P 500 Index, 33.1% in GFA and 50.3% in the Russell 1000 Growth Index. Communication services is 10.6% in the S&P 500 Index, 13.5% in GFA and 12.1% in the Russell 1000 Growth Index. Consumer discretionary accounts for 10.4% in the S&P 500 Index, 14.3% in GFA and 13.3% in the Russell 1000 Growth Index. Health care represents 9.6% of the S&P 500 Index, 12% in GFA and 8.1% in the Russell 1000 Growth Index. Industrials is 8.2% in the S&P 500 Index, 9.4% in GFA and 6% in the Russell 1000 Growth Index. Financials accounts for 13.4% in the S&P 500 Index, 9.4% in GFA and 6.4% in the Russell 1000 Growth Index. Consumer staples represents 4.7% of the S&P 500 Index, 2% in GFA and 2.4% in the Russell 1000 Growth Index. Energy is 2.8% in the S&P 500 Index, 2% in GFA and 0.3% in the Russell 1000 Growth Index. Materials accounts for 1.8% in the S&P 500 Index, 1.4% in GFA and 0.3% in the Russell 1000 Growth Index. Utilities represents 2.2% in the S&P 500 Index, 0.4% in GFA and 0.3% in the Russell 1000 Growth Index. Real estate is 1.8% in the S&P 500 Index, 0.5% in GFA and 0.4% in the Russell 1000 Growth Index.

Source: Capital Group. As of 12/31/25. Numbers are rounded.

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Footnote/Important information:
*For the three years ended 12/31/25.
 
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Investing for short periods makes losses more likely. Prices and returns will vary, so investors may lose money. View mutual fund expense ratios and returns.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the mutual fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
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There have been periods when the results lagged the index(es) and/or average(s). The indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.
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  • Class R-6 shares were first offered on 5/1/2009.
Results for certain funds with an inception date after the share class inception also include hypothetical returns because those funds' shares sold after the funds' date of first offering. Refer to dates of first sale and specific expense adjustment information.
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Price-to-earnings (P/E) ratio: The market value weighted, harmonic average of the P/E ratios of the individual companies held in the portfolio. This metric reflects the valuation of the underlying  companies held in the portfolio and is not a measure of the portfolio’s own earnings, share price, NAV, or operating performance.
 

Russell 1000 Growth Index: Tracks large-cap U.S. growth stocks by market capitalization.
 

S&P 500 Index: A market-capitalization-weighted index of about 500 major U.S. stocks. Includes reinvested dividends but excludes fees and taxes.