The Capital System℠: Our Investment Process | American Funds

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The Capital System℠: Our Investment Process

We Believe in a Smarter Way of Investing

The Capital System is our proprietary process for investing that, in combination with our consistent approach, has delivered superior long-term results.
Most funds are managed by an individual star performer or by a committee. But at American Funds, part of The Capital Group, we believe there is a smarter way — one that combines both individuality and teamwork and enables us to help investors achieve their real-life goals.
PersonalConviction_statgroup2
Long-term perspective comes from those in it for the long haul. Our portfolio managers average 27 years of investment experience and 21 years at Capital Group — more than double the industry average.1  We believe this commitment to our long-term approach has contributed to a superior track record over time.

 


 

Watch the videos below 

to learn more about our portfolio managers.

Why Personal Conviction Matters

How Teamwork Is Built on Individuality
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In The Capital System, multiple portfolio managers and analysts with different backgrounds, ages and investment styles manage portions of the same fund. They are each responsible for the portions that best match their backgrounds and areas of specialty. Though they work on the same fund, they make their own independent investment decisions.

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“[American Funds’] multiple-manager approach has produced consistently competitive risk-adjusted returns and a strong investment culture with high manager and analyst retention.”
- Morningstar, May 2013


Our managers and analysts have autonomy over the portions of the funds they manage, but they also collaborate, sharing insights with their peers and expanding their knowledge through the open exchange of ideas.

Why Personal Conviction Matters

In The Capital System, multiple portfolio managers and analysts with different backgrounds, ages and investment styles manage portions of the same fund. They are each responsible for the portions that best match their backgrounds and areas of specialty. Though they work on the same fund, they make their own independent investment decisions.

How Teamwork Is Built on Individuality
“[American Funds’] multiple-manager approach has produced consistently competitive risk-adjusted returns and a strong investment culture with high manager and analyst retention.”
- Morningstar, May 2013


Our managers and analysts have autonomy over the portions of the funds they manage, but they also collaborate, sharing insights with their peers and expanding their knowledge through the open exchange of ideas.

We Deliver Results

Our equity funds have beaten their Lipper peer indexes in:

CapSystem_mainstat3

Our Strength Lies in Our Proprietary Approach

Superior Fund Results Can Lead to Better Outcomes
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Unlike typical teams, under The Capital System, we don’t strive for consensus. Independent decision-making enables managers and analysts to act only on the most firmly held ideas they believe in, while working together as a team ensures success isn’t tied to any one manager’s results. It has been very difficult for other fund companies to replicate our process.

LEARN ABOUT HOW WE DO OUR RESEARCH

“[American Funds] are well-designed to check all the boxes. [They have] long-tenured managers who put their money where their mouths are. In addition, nearly all American Funds are cheap. The funds aren’t flashy, but they have rewarded patient investors for many years."
- Morningstar, June 2015

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Our equity funds have consistently increased in value.

Percentage of 10-Calendar-Year Periods in Which Our Equity Funds Increased in Value:

CapSystem_fundstat

Based on Class F-2 share results through December 31, 2016, calculated at net asset value with all distributions reinvested.


Our proprietary process enables us to make thoughtful investment decisions informed by diverse perspectives. That’s how The Capital System, in combination with our consistent approach, has helped us achieve a superior, long-term track record marked by reduced volatility and fund management fees that have been among the lowest in the
industry.3

VIEW FUND EXPENSE RATIOS AND RETURNS

Our Strength Lies in Our Proprietary Approach


Unlike typical teams, under The Capital System, we don’t strive for consensus. Independent decision-making enables managers and analysts to act only on the most firmly held ideas they believe in, while working together as a team ensures success isn’t tied to any one manager’s results. It has been very difficult for other fund companies to replicate our process.

LEARN ABOUT HOW WE DO OUR RESEARCH

“[American Funds] are well-designed to check all the boxes. [They have] long-tenured managers who put their money where their mouths are. In addition, nearly all American Funds are cheap. The funds aren’t flashy, but they have rewarded patient investors for many years."
- Morningstar, June 2015

Superior Fund Results Can Lead to Better Outcomes

Our equity funds have consistently increased in value.

Percentage of 10-Calendar-Year Periods in Which Our Equity Funds Increased in Value:

CapSystem_fundstat

Based on Class F-2 share results through December 31, 2016, calculated at net asset value with all distributions reinvested.


Our proprietary process enables us to make thoughtful investment decisions informed by diverse perspectives. That’s how The Capital System, in combination with our consistent approach, has helped us achieve a superior, long-term track record marked by reduced volatility and fund management fees that have been among the lowest in the
industry.3

VIEW FUND EXPENSE RATIOS AND RETURNS

1Portfolio Manager information as of December 31, 2016. Source for industry average: 2015 Morningstar U.S. Mutual Fund Industry Stewardship Survey.

2Based on Class F–2 share results for rolling periods through December 31, 2016. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except Capital Income Builder and SMALLCAP World Fund, for which the Lipper average was used). Expenses differ for each share class, so results will vary. Class F–2 shares were first offered on August 1, 2008. Class F–2 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Results for certain funds with an inception date after August 1, 2008, also include hypothetical returns because those funds’ Class F–2 shares sold after the funds’ date of first offering. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale.

3On average, our management fees were in the lowest quintile 73% of the time, based on the 20-year period ended December 31, 2016, versus comparable Lipper categories, excluding funds of funds.


Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. 

The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

Past results are not predictive of results in future periods.