Jonathan Bell Lovelace believed that fundamental research is essential to achieving superior long-term investment results. The small company he founded in 1931 has grown into one of the world’s most respected financial institutions.
We base our decisions on a long-term perspective, which we believe aligns our goals with the interests of our clients. Achieving superior, long-term returns is our only goal, so managers are rewarded for their results, not the level of assets they manage. Collectively, Capital Group associates are significant investors in the company's investment offerings.
We reward long-term results
Compensation paid to our investment professionals is heavily influenced by investment results over one-, three-, five- and eight-year periods. Increasing weight is placed on each successive measurement period to encourage a long-term investment approach.
We invest alongside you
Collectively, Capital Group associates are significant investors in the company's investment offerings.
Our interests are deeply intertwined with those of clients.
With each investment offering, Capital Group begins by defining a clear investment objective and assembling a diverse team best equipped to pursue the universe of opportunities available.
The Capital System is designed to enable individual investment professionals to act on their highest convictions, while limiting the risk associated with isolated decision-making.
Funds using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches.
Example: International Equity management team
Investment analysts representing a variety of geographic regions and sector concentrations follow the universe of investment opportunities identified in the investment offering.
Pool of analyst coverage
Portfolio managers — and, notably, analysts as well — are assigned a portion, or sleeve, of the overall investment offering to manage independently, enabling them to focus on their highest conviction ideas.
Highest conviction ideas
The Capital System bears some resemblance to a team approach. But there's an important difference: While there may be group discussions, there are no group decisions.
Overall portfolios are composed of individual managers' and analysts' highest conviction investment ideas. Combining the best independent decisions of experienced investment professionals into one portfolio results in diversification and creates the potential for superior results over time.
The end result is a diversified portfolio composed of individual managers' and analysts' highest conviction investment ideas. Combining the experienced managers' best independent decisions that are consistent with the investment offering's specific objectives delivers a portfolio with the potential for superior results over time.
For illustrative purposes only. In funds with research portfolios, analysts invest directly in a limited number of the companies they cover.
A multilayered governance structure oversees the system, enabling managers to act with confidence while managing their sleeve for optimum long-term results.
Managers and analysts share information and opinions with their colleagues and challenge each other's decisions.
Principal investment officer
• Overall objectives and yield targets
• Guiding risk management and distribution of assets among managers
Portfolio Coordinating Group
Group of senior executives at Capital accountable for:
• Portfolio manager lineup and succession planning
• Monitoring portfolio manager results
Fund board (for mutual funds only)
Independent trustees accountable for:
• Holding management responsible for results
• Setting fees and renewing contracts
As a private firm with an independent charter and robust balance sheet, we are able to invest in our capabilities through all markets, both good and bad. Our investment professionals are among the most experienced in the industry.
• Our portfolio managers average 27 years of experience, including 21 years at our company.
• The average portfolio manager tenure for the American Funds is 9 years; for the industry, it’s 6.3 years.*
Generations of knowledge over multiple full market cycles provides our clients an experience advantage.
– Morningstar®, September 2012
of our portfolio managers experienced the October 1987 crash
of our fixed income portfolio managers experienced the difficult 1994 bond market
of our portfolio managers have more than 10 years of investment experience
We base our decisions on a long-term perspective, which we believe aligns our goals with the interests of our clients. Our portfolio managers average 27 years of investment experience, including 21 years at our company, reflecting a career commitment to our long term approach.1
The Capital System combines individual accountability with teamwork. Funds using The Capital System are divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. An extensive global research effort is the backbone of our system.
As a private firm with an independent charter and robust balance sheet, we invest in improving our capabilities through good markets and bad. We have some of the most experienced investment professionals, a deep bench and a commitment to sustaining our investment process over generations.