Skip to content
Subscriber Only

American Funds Defends Active Investing After Massive Investor Retreat

After a slump, Capital Group tries to make the case for stockpicking
American Funds Defends Active Investing After Massive Investor Retreat
Photograph by Stephanie Keith/Gallery Stock

On the eve of the financial crisis, Capital Group was king of the mutual fund business—even though most investors had never heard of it. The Los Angeles-based company’s American Funds unit ran seven of the nation’s 10 biggest funds, including the largest of all, the $193 billion Growth Fund of America. Eagerly sold by brokerages such as Merrill Lynch and Edward Jones, the funds had no need for mass marketing to attract investors and even less for media attention. Capital Group has issued only three press releases in its 82-year history and politely declines most requests for comment. The idea was that the blandly named funds’ outstanding returns spoke for themselves.