American Funds Distributors
|Founder||Jonathan Bell Lovelace|
|Products||Mutual fund, target date retirement funds, 529 college savings funds|
|AUM||US$ $1.3 trillion|
(December 31, 2015)
|Parent||Capital Group Companies|
American Funds Distributors, LLC sells a large variety of mutual funds. Its funds are sold primarily through financial advisors and intermediaries. It is the third largest mutual fund family, with more than US $1.3 trillion in assets under management. American Funds is a subsidiary of Capital Group.
American Funds has been recognized for its high rate of manager ownership, meaning many of the funds’ managers invest their own money in the funds they manage. The firm also uses a multiple-manager approach instead of relying on a single fund manager for almost all its offerings. Each portfolio manager, plus the pool of research analysts who contribute to the fund, is assigned a portion of the overall assets within a fund to manage independently. Portfolio managers use their experience and knowledge to focus on their highest conviction ideas for the fund. This investment process allows for a diverse group to bring together complementary investment approaches.
American Funds is known in the mutual fund industry for its lower-than-average fees. On average, its management fees were in the lowest quintile 70% of the time, based on the 20-year period ending December 31, 2014, versus comparable Lipper categories. According to Morningstar, the American Funds family’s fees, on average, are in the cheapest quintile relative to other families.
Products include more than 40 American Funds, the American Funds Target Date Retirement Series,® CollegeAmerica, a 529 college savings plans sponsored by Virginia529,℠ Coverdell Education Savings Accounts, the American Funds Insurance Series® variable annuity funds, and other retirement plan solutions.
American Funds manages more than 54 million investor accounts, including more than 26 million IRAs, more than 2 million 401(k)s and nearly 6 million CollegeAmerica 529 accounts. CollegeAmerica is currently the largest 529 savings plan in the U.S. (as of 2015).
American Funds holds an “A” rating for overall stewardship from Morningstar, with “A” ratings for fees, corporate culture and fund manager incentives.
- Quinlan, Casey (November 8, 2013). Should Managers Invest in Their Own Mutual Funds? U.S. News & World Report
- (June 26, 2015). 2015 Morningstar U.S. Mutual Fund Industry Stewardship Survey. Morningstar (page 20)
- Skinner, Liz (September 6, 2015). The latest 529 college savings plan data. Investment News
- Yang, Janet (October 1, 2015). Capital Group Stays at the Top Through Hard Work. Morningstar.com