American Funds AMCAP AAMCPX

Morningstar Rating

Fund Research and Analysis

by John Coumarianos

American Funds AMCAP is our favorite of American's growth offerings.

This Fund Analyst Pick has a different look from its growth siblings American Funds Growth Fund of America AGTHX and American Funds New Economy ANEFX. Its portfolio "counselors," as American calls them, have the ability to search for undervalued growth stocks of any size rather than just emphasize large caps the way its sibling Growth Fund does. Read more

Kudos

Long management tenure.

Low expenses.

Good tax efficiency.

Hangs tough in most down markets.

Smaller asset base than many of its American siblings. Read more

Risks

The fund's tendency to stash a good chunk of assets in cash can cause it to lag its peers in bull markets. Read more

Strategy

The fund favors established companies with proven records of steady, above-average growth. It owns its share of highfliers, but it's also willing to scoop up names that aren't very common in other growth portfolios. Read more

Management

The fund is managed by a very seasoned group of portfolio counselors. The average member boasts more than two decades of experience with advisor Capital Research and Management. A talented group of analysts also runs a slice of the fund. The firm has reorganized its investment staff into two groups, which has reduced the fund's portfolio manager lineup from five members to four. Read more

Inside Scoop

This fund invests in proven growth companies of any size. The portfolio is spread out across sectors and individual names, and it typically sports a hefty cash stake. As a result, the fund has lagged a bit during go-go growth rallies, but its overall risk/return profile is quite attractive. Read more

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