American Funds AMCAP Fund

Scorecard
4 / 5 Stars
Lipper
4 4 5 1 3
Zacks Investment Research
3 (Hold)
Standard & Poor's
5 / 5 Stars
TheStreet.com
A (Buy)

U.S. News evaluated 464 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Note: Profile written for different share class.

Performance

The fund has returned 29.82 percent over the past year, 16.75 percent over the past three years, 18.57 percent over the past five years, and 7.56 percent over the past decade.

Trailing Returns Updated 06.30.2014
Year to date 8.4%
1 Year 29.8%
3 Years (Annualized) 16.7%
5 Years (Annualized) 18.6%
10 Years (Annualized) 7.6%

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Summary

American Funds AMCAP is a large-growth fund with a solid record of providing investors with capital appreciation. While it didn't do much growing during the worst of the downturn, it held up fairly well compared with its competitors.

As of July 03, 2014, the fund has assets totaling $40.39 billion. Its portfolio consists primarily of stocks that show potential for growth.

Despite its categorization as a large growth fund, American Funds AMCAP has solid exposure to mid-cap stocks. (about 20 percent of total assets, according to Morningstar). Over the last decade, this has proved helpful because smaller stocks have outperformed the S&P 500. The fund's technology holdings like Microsoft (the fund's largest holding as of the end of the first quarter) rebounded last year. The fund has returned 29.82 percent over the past year and 16.75 percent over the past three years.

Historically, the fund has a long track record of solid returns. It has shown a fair deal of flexibility over the years, investing in companies of a variety of sizes. Says Morningstar, "Although this is a growth fund, the ability to hold cash and American's preference to buy stocks that are out of favor and have a history of earnings helps it avoid getting caught up in manias." The fund has returned 18.57 percent over the past five years and 7.56 percent over the past decade.

Investment Strategy

"The fund's main objective is to provide its shareholders with long-term capital appreciation," according to Value Line. It favors large caps but has investments across most of the spectrum. In picking stocks, it looks for growth potential. "We're looking to invest in established growth companies--companies with proven records of above-average growth over an extended period of time," says Dale Hanks, vice president with Capital Research and Management. "We're not looking for turnaround situations, and we're not looking for brand new start-ups."

Role in Portfolio

Morningstar calls it a "core" investment.

Management

The fund takes a team-based approach to management and relies on a seasoned group of investment veterans.

Fees

American Funds AMCAP Fund has an expense ratio of 1.44 percent.

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Risk

As with any fund that is heavily invested in stocks, this one comes with some risks.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 1 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-06-11

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 1 for one year, 2 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-06-11

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-06-11

The fund appears on the 2011 Money 70 list of recommended mutual and exchange-traded funds.

Money 70

In the April 2010 edition of Morningstar's Fund Family Reports, John Coumarianos says, "Large-cap growth stocks appear as cheap as they have in years, and this fund’s advantage is that it can own them along with picking its spots among smaller fare."

Morningstar 2010-06-02

In the annual Lipper/Barron's Fund Families Survey for 2010, American Funds ranks 49th out of 57 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of A on a scale of A to F, saying, "This fund is supported by a shareholder-focused corporate culture and a fund board led by an independent chairman. Its fees also are reasonable. Overall, it's a strong steward of capital."

Morningstar 2011-03-31

In the annual Lipper/Barron's Fund Families Survey for 2010, American Funds ranks 49th out of 57 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of A on a scale of A to F, saying, "This fund is supported by a shareholder-focused corporate culture and a fund board led by an independent chairman. Its fees also are reasonable. Overall, it's a strong steward of capital."

Morningstar 2011-03-31