American Funds AMCAP Fund® Class R-2 RAFBX

More upcoming lineup changes warrant a continued muted outlook here until the team can prove its worth. It earns Average People and Process ratings.

After a firmwide self-assessment, this strategy will undergo more personnel changes, including a new leader in 2026. Capital Group is removing one of the strategy’s subsidiaries, which means two managers and one analyst team are coming off on Jan. 1, 2026. This includes fund lead principal investment officer Cheryl Frank and veteran manager Eric Stern, who will step off to focus on other responsibilities at the firm. Manager Michael Beckwith, who has been on the strategy for four years and served as a PIO, will take over the lead PIO role. Managers Aidan O’Connell, Jessica Spaly, Martin Jacobs, and J. Blair Frank, remain, providing some continuity, but J. Blair Frank will step off April 1, 2026, and retire from the firm in July. Additionally, the firm will disclose Brad Barrett as a comanager in January 2026. During the four-month stretch from January to April 2026, roughly 30% of assets, which Beckwith will distribute across the team, will change hands. These changes come after several other manager changes here in recent years, so some stability would be welcome. Time will tell if the firm finally has the right mix of managers to lead the strategy to better results.

The managers employ a disciplined approach, finding established companies with proven track records and attractive growth potential across the market-cap spectrum. This means this strategy can hold more small- and mid-cap companies than other large-growth Morningstar Category peers. For example, as of September 2025, the strategy had roughly 20% of assets in small- and mid-cap companies, landing in the top third of the category. That allocation has come down significantly recently as this management group has invested more in large- and mega-caps.

This strategy’s all-cap diversified, quality-oriented approach results in a diffuse portfolio of roughly 175 stocks that can cause it to look out of step with the narrower Russell 1000 Growth category index. For instance, the growth index has more than 50.0% of assets in technology, while this strategy only allocated 35.8% as of September. The strategy also caps individual positions at purchase to roughly 6.5%, so it is typically significantly underweight mega-cap companies relative to the top-heavy benchmark. The portfolio more closely resembles the Russell 3000 Index or its S&P 500 prospectus benchmark.

The management team made changes to the approach in 2021, and while the strategy’s been more competitive with category peers, it’s still lagged all comparable indexes through November 2025. Yet, there have been signs of life with better results in 2025. Hopefully, the revised management team can continue to build on that success.

With upcoming personnel changes, the lineup needs to prove it can implement this all-cap, quality-growth approach. It warrants an Average Process rating.

The team focuses on reasonably priced growth stocks that it intends to hold for the long haul by targeting companies with profit potential, proven management, and competitive advantages that can lead to sustained above-average growth. The managers typically steer clear of speculative fare, commodity-oriented businesses borrowing to fund growth, and turnaround plays.

At the start of 2021, leadership updated the strategy’s eligibility guidelines to broaden the opportunity set to focus on future earning potential while sharpening other criteria. The managers can now buy young firms whose promising business models aren’t yet reflected in their financial results, which is a shift from the past and could lead to more volatile performance. They have also eliminated some cyclical, commodity-driven companies from the list that often see price appreciation due to commodity moves rather than fundamental growth. They are also quicker to cut ties with companies experiencing slowing growth than in the past. They also reduced the strategy’s cash allocation, which had, at times, hit the low teens.

The multimanager approach allows team members to stick with their highest-conviction picks, while the combination of portfolio sleeves should mute volatility. By running independent sleeves, the managers can still invest in small- and mid-cap stocks without having a big impact on market prices. Even so, relatively large sleeves can make it difficult to trade these positions.

With roughly USD 100 billion in assets, this fund is one of the large-growth category’s biggest. Still, the firm's multimanager approach, which divides the portfolio into separate sleeves, has allowed the strategy to keep roughly 20% of its assets in mid-caps and small caps, which lands in the top quartile of the large-growth category. That positioning has sometimes played against its quality focus, which has typically resulted in lower return metrics, like average return on equity, than its prospectus S&P 500 benchmark’s. Yet, a recent reduction in its allocation down cap has increased the strategy’s average return metrics, which topped the S&P 500 but still lagged the Russell 1000 Growth category index’s as of September 2025.

Company-level research combined with the managers’ distinct styles leads to a diverse portfolio of roughly 175 stocks. Its sector weightings stand out from the Russell 1000 Growth category index but are more in line with its prospectus benchmark, the S&P 500. Relative to the category index, the strategy has had mid- to high-single-digit percentage-point overweightings in healthcare and industrials stocks, which include TransDigm and Eli Lilly.

The strategy has consistently stashed more of its assets in tech stocks than in any other part of the market, but relative to the category index, it hasn’t been as heavy in more than 20 years and has kept a double-digit underweighting since mid-2017. The fund’s 35.8% tech stake in September 2025 was 16.6 percentage points less than the category index weighting, but was similar to the S&P 500’s. With a roughly T% cap on individual positions at purchase, it won’t have double-digit stock positions like the category index—its largest allocation was 7.5% in Microsoft.

This multimanager strategy is undergoing more lineup changes, and while its managers are capable, this unit needs to prove it’s up to the task. It warrants an Average People rating.

After a firmwide self-assessment, this strategy is undergoing more personnel changes that come on the heels of considerable change in recent years. On Jan. 1, 2026, Capital Group is removing one of the strategy’s subsidiaries, which means two managers and one analyst team are coming off. That includes the fund lead PIO Cheryl Frank and veteran manager Eric Stern. Michael Beckwith, who has been managing the strategy for four years, will take over the lead PIO role. He has been a co-PIO here for a year, so he should be able to handle the increased responsibilities. Additionally, the firm will disclose Brad Barrett as a comanager. The team will be rounded out by the remaining managers of Aidan O’Connell, Jessica Spaly, Martin Jacobs, and J. Blair Frank, which provides some continuity, at least for a few months. Blair Frank will then step off the strategy on April 1, 2026, and retire from the firm in July. During the four-month stretch from January to April 2026, roughly 30% of assets will change hands. Beckwith will handle allocating that capital across the management team. Jacobs, Spaly, and O’Connell have been on the strategy for six, seven, and 10 years, respectively, which helps. Time will tell if the firm finally has the right mix of managers for the job.

Capital Group stands out from the pack as it enhances capabilities around strong core competencies. It earns a High Parent rating.

Since 1931, Capital Group, parent of American Funds, has thoughtfully built out capabilities to become one of the world’s largest asset managers, managing more than USD 3 trillion dollars. Building on the success of its long-term-oriented, multiple-manager system for global equities, the firm has developed robust fixed-income and multi-asset units, each managing more than USD 500 billion. In January 2026, as part of its periodic review of its now five distinct research organizations, Capital Group implemented changes to its equity investment subsidiaries. This exercise resulted in most equity strategies having at least one portfolio manager change, but according to the firm, it better balances each of Capital Group’s three equity groups in terms of investment breadth and helps the firm better align leadership opportunities across the groups. These kinds of shifts have occurred before, with the last coming in 2018.

Capital Group has also turned its attention to some modern opportunities. To address public/private market convergence trends, it launched in April 2025 two semiliquid funds with private market giant KKR. In keeping with its signature portfolio management approach, it splits those funds into multiple sleeves, which are managed independently by distinct managers at each firm. Capital Group plans to deepen this relationship with target-date and model portfolios, as well as public/private equity funds. On the other end of the spectrum, although the firm is firmly dedicated to active management, it has also acknowledged investor preference for passive investing and has thus partnered with indexing stalwarts Vanguard, BlackRock, and Schwab on active/passive models. Capital Group’s proven investment prowess, strong reputation among investors, and scale mean it can be selective with its partnerships.

In addressing another recent trend, since early 2022, the firm has launched more than 25 active exchange-traded funds globally, most of which are distinct, but several are similar to some of its legacy American Funds mutual funds. Unlike some of its peers, though, it has not filed for SEC exemptive relief to offer ETFs as a share class.

That’s a lot of change for such a storied and sizable firm, but Capital Group has a long history of serving investors well.

The fund’s historically moderate growth profile, decent small- and mid-cap weighting, and diversified portfolio have typically led to closer correlations with the Russell 3000 Index than with the top-heavy Russell 1000 Growth category index or its S&P 500 prospectus index, making it a better gauge.

As mega-cap stocks drove market gains in 2023 and 2024, this strategy’s diversified approach weighed on results as the strategy landed in the bottom half of the large-growth category both years. In 2024, the strategy lagged the Russell 3000 Index and significantly trailed the Russell 1000 Growth Index in part due to underweighting companies like Nvidia and Amazon.com.

Over the longer term, as some of these mega-cap stocks have consistently outperformed, the strategy has underperformed the growth index and landed in the bottom quartile of the category over the past 10-, 15-, and 20-year trailing return periods through November 2025.

The management team updated the strategy’s eligibility guidelines in early 2021. Since then, the R6 shares’ 9.4% annualized gain through November 2025 was 20 basis points worse than the large-growth category norm, and it fell 2.2 and 4.6 percentage points short of the Russell 3000 Index and the category Russell 1000 Growth Index, respectively.

In addition to updating its eligibility guidelines, the managers reduced the fund’s cash stake, which has posed as a headwind in the past, such as in 2019 and 2020, when it exceeded 10% of assets and equity markets experienced solid gains.

American Funds AMCAP R2's Prospectus Adjusted Expense Ratio is 1.42% per year. It places it in the most expensive quintile of the Morningstar US Fund Large Growth Category, where the median fee is 0.82% per year. This cost positioning translates into a Medalist Rating Price Score of -1.83, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.