Growth Investing with Both Feet on the Ground

Thornburg Core Growth Fund is a bottom-up, fundamentally driven, flexible, and focused portfolio that includes mostly U.S. growth stocks, with the ability to invest in equities up and down the capitalization spectrum.

Working Photo "We search for good businesses with promising growth prospects that trade at reasonable valuations. Good businesses typically have durable competitive advantages that lead to strong market share and high margins. We look for secular tailwinds and a large addressable market—to provide a long runway for growth. We also consider valuation a key component of investing and are only willing to pay a reasonable price for growth. Our goal is to build a diversified, all-weather portfolio that will perform well in both up and down markets."

— Tim Cunningham & Greg Dunn

Overall Approach

Managed in a bottom-up, fundamentally driven, hard-research intensive fashion.

The fund’s flexible mandate gives us wide latitude to invest in different types of growth companies, up and down the capitalization spectrum.

A flexible mandate means little if managers choose the wrong stocks. As with other Thornburg products, our research is bottom-up, fundamentally driven, stock-by-stock.

While value managers often start from a place of valuation and decide whether a company is a good business, we tend to start from a place of growth and ask:

  • Is there a long-term growth opportunity?
  • Is it a good business?
  • Is the valuation reasonable?

The Opportunity Set

We look for:
Attractive growth characteristics: A large addressable market, secular tailwinds, durable competitive advantages, and a high rate of growth with operational leverage.

Good businesses: High barriers to entry, quality management, durable competitive advantages, strong market share, high and sustainable margins.

Reasonable valuation: We consider growth prospects, business models, historical valuation ranges, conduct peer valuation comparisons, and look at investor sentiment.

Investment Process & Portfolio Construction

Core Growth uses Thornburg’s basket construct; we attempt to keep the exposure to each basket roughly equal to provide optimal diversification balance.

Consistent growth companies exhibit steady earnings and revenue growth; these companies often have subscription or other recurring revenue profiles.

Growth industry leaders often have leadership positions in growing markets, sometimes with dominant market share, and tend to be larger and more established.

Emerging growth companies are typically growing rapidly, often carving out a niche in an existing market. They tend to be smaller, earlier-stage companies. We expect these companies to generate high returns over time, but with higher volatility.

Risk Management

From initial fundamental research, through the continuous monitoring of our investment thesis, to ongoing evaluation of business developments, we know what we own and why we own it.

We diversify through Thornburg’s basket construct, industry and sector representation, position size, market cap, and through monitoring stock-specific risks.

A core component of our risk management process is maintaining a consistently executed sell discipline. We tend to be fast to sell a holding when a crack appears in the investment thesis.

Distinguishing Characteristics

Flexibility: The fund operates under a flexible mandate, allowing us to pursue many different types of growth stocks in many different areas.

Focus: At well under 100 holdings, Thornburg Core Growth is more focused than many domestic-growth peers.

Important Information
Before investing, carefully consider the Fund’s investment goals, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, contact your financial advisor or visit our literature center. Read them carefully before investing.

Investments carry risks, including possible loss of principal. Additional risks may be associated with investments outside the United States, especially in emerging markets, including currency fluctuations, illiquidity, volatility, and political and economic risks. Investments in small- and mid-capitalization companies may increase the risk of greater price fluctuations. Investments in the Fund are not FDIC insured, nor are they bank deposits or guaranteed by a bank or any other entity.

The performance of any index is not indicative of the performance of any particular investment. Unless otherwise noted, index returns reflect the reinvestment of income dividends and capital gains, if any, but do not reflect fees, brokerage commissions or other expenses of investing. Investors may not make direct investments into any index.

Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.

Funds invested in a limited number of holdings may expose an investor to greater volatility.

Class R shares are limited to retirement platforms only.

Class I shares may not be available to all investors. Minimum investments for the I share class may be higher than those for other classes.

There is no guarantee that the Fund will meet its investment objectives.

Please see our glossary for a definition of terms.

Thornburg mutual funds are distributed by Thornburg Securities Corporation.

Thornburg Investment Management, Inc. mutual funds are sold through investment professionals including investment advisors, brokerage firms, bank trust departments, trust companies and certain other financial intermediaries. Thornburg Securities Corporation (TSC) does not act as broker of record for investors.