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Fund Spy

(Re)introducing Capital Group's American Funds

More investors now have access to this strong active shop.

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Capital Group recently made its entire American Funds open-end lineup available commission-free on Fidelity and Schwab's brokerage platforms, providing greater access to one of the industry's flagship firms. Investors who have avoided the lineup may want to reconsider it. Indeed, the firm's competitive advantages run deep, especially in equities. Below is a select overview of the firm and lineup. It elucidates American Funds' key competitive advantages and areas for improvement.

Lineup Overview
American Funds' offerings come in several series, such as a target-date retirement series and a college target-date series. At the core, though, is a 35-fund lineup composed of 14 equity funds, four allocation funds, and 17 bond funds. Their scope is global and covers most asset classes, with some overlap. It's not exhaustive, however. The firm doesn't have a fund in the foreign large-value Morningstar Category, for example, and smaller-cap strategies are lacking. Of the 27 funds assigned a Morningstar Analyst Rating in American Funds' core lineup, 22 are Medalists, including all of its equity and allocation funds. Exhibit 1 lists the medalists by the tickers of their no-load F1 shares, newly available to retail investors at Fidelity and Schwab.

Alec Lucas has a position in the following securities mentioned above: NPFFX, AFIFX, AEGFX, SCWFX, AMFFX. Find out about Morningstar’s editorial policies.