Morningstar Names Capital Group’s American Funds as Its Top Fund Family | American Funds
American Funds ®

investment perspectives

Morningstar Names Capital Group’s American Funds as Its Top Fund Family

Morningstar named Capital Group’s American Funds the number one fund family in its quarterly evaluation of the largest 150 fund families.1

The analysis — scanning a universe of fund companies holding 97% of investors’ assets in the U.S. market — determines which ones are best aligned with the needs of investors based on a number of qualitative and quantitative criteria.

This analysis is designed to identify fund families that “build a fiduciary relationship with their investors,” according to Morningstar. The research finds “firms that put investors first and align their interests with their shareholders will succeed in the long run.”

Specifically, Morningstar lauded Capital Group’s long stature as a “standard-bearer in asset management” with its “reliable equity and allocation offerings.” Morningstar cited Capital Group’s multimanager system as the reason for its strong results over time.

“Dividing each fund into independently run sleeves lets managers invest in line with their styles, enhancing diversification and reducing volatility of the overall portfolio,” Morningstar says. 

The analysis evaluated fund companies based on a number of criteria including:

  • Investment management fees. Fund families’ average fund fees were averaged and ranked as low, average or high.
  • Fund flows. Flows of investment money into or out of a fund family were estimated by looking at the change in assets due to factors other than the investment returns of the funds.
  • Fund liquidation. The number of funds closed or merged as a percentage of funds offered was examined over the trailing five-year period.
  • Manager investment. Morningstar ranked fund companies based on the percentage of fund assets with at least one manager personally investing $1 million or more.
  • Manager retention. This measure calculated the percentage of a fund company’s portfolio managers that remained with the firm during the trailing five-year period. Morningstar finds that good firms keep manager retention at 90% or higher.
  • Manager tenure. The average number of years that the manager has been with the firm was calculated. Morningstar finds firms with average manager tenures of 15 years or more tend to offer funds that consistently beat the risk-adjusted results of funds where managers don’t stay as long.

1Morningstar research published July 1, 2017. Fund companies were ranked using relative measures among the universe.

©2017 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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. 

Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.