Morningstar Rating

Fund Research and Analysis

by Michael Breen
American Funds Fundamental Investors still has what it takes.

Since its 1978 inception this fund has consistently generated topnotch returns without excessive risk. Its trailing returns land in the category's top quintile in every trailing period of three years or more and its standard deviation--a measure of volatility--is in line with the S&P 500's.  Read more 

Kudos

Low expenses.
Great long-term record.
Not as bloated as some of its siblings. Read more 

Risks

Big foreign stake could hurt if the U.S. dollar rallies.
Energy exposure could add volatility. Read more 

Strategy

This fund's investment team employs rigorous fundamental analysis to search for undervalued or overlooked companies that have solid long-term growth potential. Often, the managers let winners ride or pick up depressed growth stocks, occasionally pushing the fund into large-blend territory.  Read more 

Management

The fund's five portfolio counselors boast an average of more than 29 years of investment experience, and 11 years working on the fund. Investors would be hard-pressed to find managers and analysts who know their industries better. The managers oversee other portfolios as well and are backed by a legion of analysts.  Read more 

Inside Scoop

A low-key and sometimes quirky approach to growth is this fund's recipe for success. Its portfolio managers will load up on their favorite sectors at times. Still, the fund repeatedly beats its competition without taking on too much risk.  Read more 

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