Growth Fund of America, continued....
I have been tracking the Growth Fund's holdings of FNMA and FMCC for six quarters. I haven't tracked the preferred issues since I'm invested only in Freddie commons. In addition to the quarterly numbers I think the trend of the numbers is also worth considering:
FNMA FMCC
12/31/17 67,083,000 68,082,000
3/31/18 70,296,000 +4.8% 70,348,800 +3.3%
6/30/18 29,388,000 -58.2% 96,538,000 +37%
9/30/18 37,884,270 +28.9% 86,138,785 -10.8%
12/31/18 52,637,000 +38.9% 87,037,375 +1.04%
3/31/19 77,989,064 +48.2% 91,929,599 +5.6%
So: 1) it appears that The Fund has been more inclined to hold Freddie commons than Fannie commons; 2) The Fund holds (as of 3/31/19) more than 2 1/2 times the amount of Fannie commons as it held at the low point of 6/30/18; 3) checking for correlation between The Fund's share count and market price of Fannie commons (viewing the FNMA chart on Yahoo Finance) it appears that The Fund has made its largest accumulation of Fannie commons during the quarter where the price of FNMA was at it's highest over the last five out of six quarters - in other words, they weren't scarfing up the shares when the price was down in the $1.50's as it was during most of 2018 - they are loading up NOW, at a much higher price.
4) I wonder why is is that none of the other large mutual funds are reporting holding any quantities of Fannie or Freddie commons of any consequence?
Regarding the ratio of preferred holdings to commons: an absolutely valid point, but I think that if we were to know the trend of that ratio this might be even more helpful.
Finally: 5) the reason that The Fund hasn't bought more FMCC is because I'm buying it all.....
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