Our outlook toward large-cap growth stocks remains favorable. Despite the markets strong first-quarter rally, overall valuations still appear reasonable, and we believe they should provide support if current corporate earnings estimates prove to be too optimistic. Nevertheless, valuation is not a catalyst for a rallying market, so we remain opportunistic, rather than aggressive, in our security selection efforts. Relative to the benchmark, we maintained the Funds risk at levels below our long-term targets in the first quarter, and we will continue to search for attractive, long-term secular growth companies available at attractive prices.
If you fit the profile of a more aggressive investor able to accept greater volatility in exchange for higher potential return than is offered by the Growth Equity Fund, you will want to consider this Fund as a core holding for your portfolio. Because companies with these characteristics often retain their earnings, investors should expect low to no dividends.
- Combine top-down, theme-driven approach with bottom-up fundamental stock selection to construct a portfolio of primarily large-cap growth stocks.
- Select stocks with emphasis on growth potential, quality of earnings and management experience.
- Seek to provide long-term capital appreciation for investors looking to participate in longer-term investment themes, which may contribute to increased volatility.