American Funds Growth Fund of America C (GFACX) is a Large Cap Growth fund that invests in companies valued at over $10 billion. These funds target major U.S. firms expected to grow faster than their large-cap competitors. Launched in March 2001, GFACX is managed by American Funds in Los Angeles and oversees about $4.04 billion in assets. The fund’s annual return over the past five years is 10.96%, which is average compared to its peers, while its 3-year return stands at 27.36%.

Volatility And Performance

Though these returns are noteworthy, they may not account for all expenses. The fund has a standard deviation of 14.67% over three years, which is higher than the average of 11.45%, suggesting more volatility. With a 5-year beta of 1.1, GFACX is more volatile than the market. Its negative alpha of -3.8 indicates it has underperformed against its benchmark. The fund primarily invests 81% in stocks, focusing on technology, finance, and retail, with a turnover rate of 32%. The expense ratio is 1.35%, and since it’s a no-load fund, the minimum initial investment is $250, while subsequent investments need at least $50. Given its focus on large-cap growth stocks, the fund reflects market performance from the fourth quarter of 2025, which saw notable gains. However, the higher beta also means it will experience more dramatic price swings, an important factor to watch in the coming weeks. This volatility may provide options traders with opportunities if they expect larger price movements.

Inflation And Market Sentiment

The market is currently processing the latest inflation report, showing that the December 2025 Consumer Price Index came in slightly above expectations at 3.3%. This has pushed the CBOE Volatility Index (VIX) back up to 19, indicating heightened market anxiety about the Federal Reserve’s future actions. Thus, considering protective measures or trades that leverage this uncertainty could be smart. With a strong emphasis on technology, we need to prepare for the upcoming earnings season starting next week. Due to mixed pre-announcements, one effective strategy may be to use options on the Nasdaq-100 index to take advantage of potential spikes in volatility. This allows us to profit from significant price moves in either direction without having to predict the results of earnings reports. Moreover, the fund’s stakes in retail and finance should also be examined. December 2025 retail sales figures were solid but did not show exceptional growth, leading to a cautious outlook for consumer spending. This scenario suggests that we might consider using put option spreads on retail-focused ETFs to guard against possible downsides. Historically, this portfolio has struggled to generate alpha, meaning it hasn’t consistently outperformed the market when adjusted for risk. For our strategy, this indicates that simply staying long in this market segment might not be the best approach. We should focus on relative value trades, possibly favoring leading technology companies over the more cyclical consumer stocks included in the fund. Create your live VT Markets account and start trading now.

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