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Investing Specialists

Greener Pastures

Dale Harvey left the burdens of managing $20 billion for Capital Group to form his own boutique inspired by Thomas Jefferson.

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Dale Harvey didn't like being popular. In the mid-2000s, Harvey found himself managing $20 billion in mutual fund assets for Capital Group, the parent firm of American Funds. Harvey had built up solid records running diversified sleeves of several team-managed funds such as  Washington Mutual (AWSHX), SMALLCAP World (SMCWX), and  American Balanced (ABALX). His work hadn't gone unnoticed by investors and his colleagues. Each morning, it seemed, he came into the office to find that the lead manager on the funds had earmarked more inflows for him to invest. Most managers wouldn't mind having such a problem. But Harvey considered it a burden.

For starters, he often couldn't build full positions in the out-of-favor companies he preferred without tripping over restrictions on how many of the outstanding shares he could buy. Investing millions of dollars at a time, he also ran the risk of artificially popping stock prices. Most concerning to Harvey, though, was the idea of buying stocks he didn't have high conviction in.

Rob Wherry does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.