Invesment Management Firms

Why Morningstar Thinks Capital Group Is The Best

In its new stewardship Grade, which was recently issued for Capital Group’s American Funds, Morningstar awarded the company an A. The overall grade includes corporate culture, fund manager incentives, fund board quality, regulatory history and fees.

According to Morningstar’s Janet Yang, Capital Group and all its affiliations, including American Funds, maintains its top position among the stewards of investors’ capital. The firm’s corporate culture of continuous investing, commitment to long-term results, and its devotion to financial advisers has earned it a reputation as the largest asset manager in the world. Capital Group has been in business for eight years, which has given it extensive experience in surviving the uncertain fixed-income environment. Capital Group has over $1.4 trillion worth of assets and more than 7,000 employees.

The firm has a strong management team that consists of the most reputable individuals, including Tim Armour. Tim Armour, who joined Capital Group in 2015, is the chairman of the company. He has successfully created a favorable environment for the company to grow and compete effectively. Tim has exhibited the ability to sustain the company’s culture of continued development. The firm is famed for its multi-manager investing system that was introduced in the 1950s. The system allows a dozen or more managers to manage portions of a fund’s portfolio independently. The multi-manager system results in less volatile funds and helps during the transition of portfolio managers where investors do not experience jarring change.

Capital Group has improved on their transparency as they are exposing their asset outflows and new reports for advisors and institutions. Advisors and institutions can now access sector exposure for each portfolio manager, top holdings and portfolio characteristics. However, the company discloses portfolio managers who are running small percentage of assets, which the firm considers as the trial period. Capital Group’s investors benefit from long term investment teams around. They include portfolio managers and the firm’s analysts. In other firms, transitioning means retirement or movement of managers between firms while analysts not considered permanent.

Tim Armour is the CEO of Capital Group. He serves as the principal executive officer and chairman for Capital Research and Management Company, Inc, an affiliate of Capital Group. He has 33 years of experience in equity portfolio management. Tim Armour began his career at Capital Group where he participated in The Associates Program. Later, he served as an equity investment analyst. In this position, he was responsible for covering U.S. service corporations and global telecommunications.

Connect with Timothy (Tim) Armour on Facebook or LinkedIn for more information.