|
 "Year-to-date our flows are about even, and if trends continue we
expect to end the year about even," said Timothy Armour, who chairs
the management committee of American Funds parent Capital Group
Companies, in a telephone interview on Wednesday.
An end to the outflows would mark an important milestone for the No.
3 mutual fund company, which has lost ground to Vanguard Group Inc
and other companies whose low-fee indexed products gained a new
following after the financial crisis.
Armour's forecast matches trends so far in 2014. Through August the
company had net customer deposits of $5.1 billion, according to
Lipper, a Thomson Reuters, unit, compared with net customer
withdrawals of $16.1 billion in 2013. Both figures are a pittance
compared with American Funds' $1.2 trillion in fund assets.
Closely-held American Funds says it manages $1.4 trillion across all
products.
Armour said the company's flow picture has improved with the
performance of some mutual funds. For instance, after posting mixed
returns in 2009 and 2010, the $95 billion Capital Income Builder
fund, which Armour co-manages, has come back. It returned 11.98
percent for the 36-months ended Oct. 7, according to Morningstar,
better than 74 percent of its peers.
BALANCED VIEW
With its numbers improving, American Funds has been pressing the
case for active management with intermediaries who sell its
products.
"We're trying to get a more balanced view out there in the market
about active versus passive," Armour said. "We're trying to make the
discussion more well-rounded."
The company now has 223 sales employees who visit financial
advisers, up from 159 in 2009, a spokesman said. It also has boosted
to 34 the number of employees who work to bring its funds to
retirement plans, up from 18 in 2009.
[to top of second column] |
In addition, American Funds plans to release a study on Thursday
finding that actively managed large-cap funds with low expense
ratios and managers who had put in relatively high amounts of their
own money, beat indexes more often than other active funds.
According to the study an investor who put $100,000 into a stock
portfolio made up of such funds in 1994 would have grown it to
$551,409 by 2013 - 31 percent more than if the money were in
exchange-traded funds.
Other studies have come to similar conclusions. Securities rules
require portfolio managers to disclose roughly how much of their own
funds they own. American Funds does not require its managers to
invest in their own funds.
But Steve Deschenes, the company's head of product development, said
97 percent of its assets are managed by individuals at the firm who
have marked the highest level of ownership shown on disclosure
forms: $1 million or more.
(Reporting by Ross Kerber; Editing by Bernard Orr)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
