A source of strength is that the firm has been adept at holding onto portfolio management talent, providing continuity for strategies, as proven by low turnover over the past five years compared with others in the industry. Open-end and exchange-traded fund fees are a weakness at the firm, contributing negatively to the rating. On average, the firm charges fees on its funds that are in the highest quintile of category peers. With the current market environment of fee compression, this is cause for concern, as investors may flock to alternate asset managers over time to get a better deal.
Does American Funds Growth Fund of America’s Measured Approach Still Have Merit?
The massive fund’s more cautious, diversified portfolio has held it back in recent years.