The Growth Fund (HNASX) seeks long-term capital appreciation through investments in common stocks of growth companies. In taking a growth approach to investment selection, the fund will normally invest at least 80% of net assets (including any borrowings for investment purposes) in the common stocks of large companies.
A large company is defined as one whose market cap is larger than the median market cap of companies in the Russell 1000 Growth Index, a widely used benchmark of the largest domestic growth stocks. However, because the market capitalization of the companies in the fund’s portfolio and the Russell Index will change over time, the fund will not automatically sell or stop buying stock of a company it already owns just because the company’s market capitalization changes.
|Inception||January 22, 2001|
|Morningstar Category||Large Growth|
|Lipper Classification||Large-Cap Growth Funds|
|Benchmark||Russell 1000 Growth Index , S&P 500 Stock Index|
|Expense Ratio||0.95% (12/31/15)|
|Median Expense Ratio for Peer Group||1.16% (12/31/15)|
|Minimum for Initial Purchase||$500/$200 IRA|
The expense ratio shows the percentage of fund assets deducted annually to cover operating expenses. The peer group ratio is according to Morningstar Direct, 2015, based on each fund’s Morningstar classification.
|Morningstar Overall Rating||****|
Lipper ratings for Total Return reflect the Fund’s historical total return performance relative to peers as of 12/31/16. Lipper ratings for Consistent Return reflect the Funds’ historical risk-adjusted returns, adjusted for volatility, relative to peers as of 12/31/16. The Lipper ratings are subject to change every month and are based on an equal-weighted average of percentile ranks for the Total Return and Consistent Return metrics over three-, five-, 10-year and Overall periods. The highest 20% of funds in each peer group are named Lipper Leader or a score of 5, the next 20% receive a score of 4, the middle 20% are scored 3, the next 20% are scored 2 and the lowest 20% are scored 1. Homestead Growth Fund, in Lipper’s Large-Cap Growth Funds classification, received a rating of 5 for the five-, 10-year and Overall periods (number of funds rated in parentheses). Total Return: Five Year (522 funds), 10 Year (379 funds) and Overall (595 funds). Consistent Return: Five Year (521 funds), 10 Year (378 funds) and Overall (594 funds). The Homestead Growth Fund received a rating of 4 for the Total Return (595 funds) and Consistent Return (594 funds) 3-year period. Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at lipperleaders.com.
Morningstar rated this Fund, in Morningstar’s large-growth category, 4 stars for the Overall period out of 1,315 funds, 4 stars for the 10-year period out of 809 funds, 4 stars for the five-year period out of 1,154 funds and 3 stars for the three-year period out of 1,315 funds for performance periods ending 12/31/16. The Morningstar Rating for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Past performance is no guarantee of future results. Ratings are updated regularly. More information is available at morningstar.com.
Equity funds, in general, are subject to style risk, the chance that returns on stocks within the style category in which the fund invests will trail returns of stocks representing other styles or the market overall. The Growth Fund is classified as“nondiversified,” which means that the proportion of the fund’s assets that may be invested in the securities of a single issuer is not limited, making the fund more susceptible to volatility stemming from one-time events and to the financial conditions of the issuers in which it invests than a diversified fund. T. Rowe Price Associates is not affiliated with Homestead Funds, RE Advisers Corporation, RE Investment Corporation or NRECA.