The Capital Advantage
Don’t Settle for Average
Our Equity-Focused American Funds Have a Long History of Outpacing the Market Our Investment Management Has Provided Investors With an Advantage
Persistency Has Been Relatively Abundant for American Funds Funds Have Led Their Indexes and Often Continued to Lead in the Subsequent Period
1Data from Morningstar. Based on calendar-year returns of actively managed funds, excluding the American Funds, whose relevant benchmark is the S&P 500 Index. This universe excludes funds that fell in the Morningstar Moderate and World Allocation categories. Funds with incomplete data were removed from the analysis. For more information about filtering methodology, see Methodology.
4The capture ratio measures the extent to which a manager has limited negative absolute returns relative to the market’s decline. Market declines are defined as those months in which the market return was negative. This ratio is akin to a downside beta — specifying the percentage of the down market “captured” by the manager. If, for example, it is greater than 100%, then the manager has trailed in the down market. Conversely, a percentage less than 100% indicates a positive excess return for those market declines; the smaller, the better. Market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. Data for downside capture are based on monthly returns for Class A shares. American Funds U.S. equity-focused funds represent only those funds (there are seven) whose comparable index is the S&P 500. For the list of funds that fall into this group, see Methodology.
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