American Funds Invmt Co of Amer AAIVSX

Morningstar Rating

Fund Research and Analysis

by Michael Breen

American Funds Investment Company of America's eye for quality serves it well.

This is one of the highest-quality portfolios in its category. It's full of highly profitable firms with strong financial positions. Its average Morningstar Profitability score, ROE, and net margin are well above the S&P 500 Index's and the typical large-blend fund's, but its debt/capital ratio is much lower. Read more

Kudos

Low expenses.

Great long-term record.

Experienced managers at the helm.

Awesome research capabilities. Read more

Risks

Sizable cash stakes at times won't please style purists.

Huge asset base and tremendous recent growth raise concerns. Read more

Strategy

The fund favors established blue-chip companies, many of which pay dividends. As a result, the fund devotes a decent portion of assets to stocks in industries such as oil-services, financials, and tobacco. Read more

Management

The fund is managed by a veteran six-person team. The firm's research capabilities are hard to match as it employs more than 140 investment pros globally. Investors will also be hard-pressed to find analysts with greater industry expertise. Joyce Gordon, for example, has followed banks since 1987. Read more

Inside Scoop

A no-frills approach is what this fund is all about. It tries to minimize volatility by holding a sprawling portfolio of multinationals. Among the largest funds around, it owns an impressive long-term record. Read more

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