Last updated: 14 Jul 24 23:57:12 (UTC)

What the Experts Say about American Funds

What The Experts Say…

“American Funds is my investment manager of choice (they manage all of my family’s money). As an independent Advisor I have access to every mutual fund family in America, but I have been exclusively recommending AMF for over two decades (with rare exceptions).” ―Michael Paulding Thomas

“For the entirety of my half-century career, no mutual fund company has ever championed long-term equity investing as consistently, eloquently and even relentlessly as have the American Funds. Indeed, there’s been nobody close; the American Funds group has been in a class by itself. I have always applauded them for this unreservedly.” ―Nick Murray

“Welcome to what many believe to be the world’s best fund management organization.” ―Financial Times

“American Funds sells mutual funds you could bring home to meet your parents: the funds are described with words like steady, solid, and dependable” ―Boston Globe, September, 17 2004

“The American Funds family of mutual funds is one of the largest of its kind in the world because investors and advisers alike are attracted to the low-cost, high-quality attributes that combine for the best funds to buy. You’ll especially find American funds in retirement accounts like IRAs and 401(k)s because their portfolio managers’ long-term outlook and dozens of years of experience result in portfolios that are built to last.”

“Therefore American mutual funds don’t often hit the lists of best short-term performers — they are typically among the best performers for long-term periods, such as over five and 10 years and beyond.” ―InvestorChoice, December 2015

“They have funds that have consistently outperformed and consistently been lower-cost versus their active peers.” ―Todd Rosenbluth, director of ETF and mutual-fund research at CFRA

“American Funds very visibly accomplishes what index-fund proponents claim cannot be done: outperform year after year, decade after decade.” ―Morningstar, January 30, 2014

“A long-term broadly diversified collection of the world’s great publicly-traded, mainstream companies (ie, mutual fund), is the finest, most transparent, simplest, low-stress and most effective of any investment in the history of humankind. And American Funds is the best at it.” ―Michael Paulding Thomas

“The American Funds group has won a legion of admirers for its distinctive investment approach… ‘We like their management and their people,’ says a marketer for one of the fund’s biggest distributors. ‘We like their buy-and-hold philosophy. They don’t surprise us… They’re defensively managed.” ―Barron’s, January 12, 2004

“The American Funds line-up follows an ‘old-school’ approach that is coming back into favor, said an analyst at Morningstar… ‘They buy for the long-term because they like the business…’ There is also an emphasis on dividend-paying stocks, which is timely because of tax breaks which took effect last year. American Funds wins fans with conservative style.” ―Reuters News, January 9, 2004

“American Funds has a strong record of acting in shareholders’ interests, by keeping costs low and focusing on long-term results… We think that their funds… remain attractive options.” ―Morningstar Mutual Funds, January 6, 2004

“American Funds has focused more on retaining the top investment talent… than on gimmicks such as rolling out new funds.” ―Morningstar Fund Family Reports: American Funds, December 2003

“As for why they’re steering their clients toward American Funds, advisers mainly say it’s their consistent performance and low annual cost — qualities that seem to engender a considerable level of trust.” ―Dow Jones News Service, October 13, 2003

“American Funds gives you Nordstrom service with Tesla performance at Walmart prices.” ―Michael Paulding Thomas

Capital: The Story of Long-Term Investment Excellence, by Charles D. Ellis

“Capital (American Funds) is the best managed investment organization… that I’ve known as a consultant over the past 40 years. I’m confident that Capital is one of the best and quite likely the best designed, best staffed, and one of the best managed professional firms in the world.” ―Charles Ellis

“Capital, the parent firm of American Funds, is one of the finest business organizations in American Business. This book was written by an index fund /no-load proponent who was looking to debunk American Funds (which are neither indexed, nor no-load) and instead he (Ellis) discovered their exceptional values, performance and pricing. This story is fast-paced and highly interesting, both to Advisors and clients.” ―from the forward of the book.

What Capital Group / American Funds Says…

In this 23-minute Youtube video (2024-06), Mike Gitlin, CEO of Capital Group, joins David Rubenstein on Bloomberg Wealth. At a minimum, watch the first 12 minutes and the last 5.

“There are 290,000 financial advisors in America. 212,000 of those own a Capital Group strategy for their clients.”

―Mike Gitlin, President and CEO of Capital Group. From interview with David Rubenstein on Bloomberg Wealth, June 27, 2024

“We have this ‘Capital System’ (at Capital Group / American Funds) where money managers are encouraged to have their own points of view and to express it. Trying to understand management teams (of companies to invest in) and their quality is huge for what we do. And, in fact, is one of our most important strategic advantages. The index funds don’t spend any time evaluating management, not one bit. If we can do that well, that really gives us an advantage.” ―Don O’Neal, Capital Group Portfolio Manager

Their Three Most Important Values

I don’t want to go too much down a rabbit hole of statistics but I do want to mention three of their values that are aligned with mine (and Nick Murray’s), and thus make them a wonderful solution for our investment philosophy:

The Capital System is distinctive way of managing money. Early in Capital Group’s history, they realized that their funds would outlast the professionals who managed them. So they asked themselves a key question: If a portfolio manager left the firm, how could they keep funds going strong?

Answer: By dividing funds into sections and giving each of the existing managers a portion to administer, no fund would be too dependent on a single person.

“By incorporating the highest conviction investment ideas of each manager in a fund, we aim to both increase the diversity of those ideas and reduce the volatility of a fund, which can give you a smoother ride in bumpy markets.”

They take a long-term approach. Their investment managers’ compensation is tied to short-, medium- and long-term results, with a greater focus on the long term. Also, Capital Group is a privately held firm, so rather than being distracted by what’s good for “the Street,” they can focus on what’s best for long-term investors.

“We invest in companies for the long-term, not buy stocks for the short-term.” ―this was told to me personally by one of their fund managers.

Their deep and fundamental research is the backbone to delivering superior results. They believe that the best way to get to know a company is to know the people behind the business. they get to know both upper management and the employees on the ground.

“Meetings are essential to our research. Our investment professionals conducted more than 20,000 meetings with companies in 2023.”

Other Resources

Capital Group / American Funds Interviews on Youtube. In these videos the CEO interviews funds managers. Very insightful and not very technical. Highly recommended.
Capital Group / American Funds Podcasts.
If you would like to chat with me about how American Funds can help you build wealth schedule a no-obligation, no-cost conversation with me.
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A brief compilation of excellent investment advice from the best of the best.

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