Should Richard Chimberg Be Telling you Where to Invest your Nest Egg?
Friday, February 5, 2010
Richard Chimberg on American Funds, the Source is Listed below you have to actually READ the Page to Find it... if you need Help email me at Crystal@CrystalCox.com 1996 News Archives..
"" "AMERICAN FUNDS
The quiet giant that helped write the book on investing uses a multimanager approach.
--A heart attack might cause some people to see their lives flash before their eyes. But during his brush with death in 1953, Jonathan B. Lovelace saw his stock portfolio instead. Worried about succession, Lovelace, founder of American Funds parent company Capital Research & Management, divvied responsibility for his fund with three other managers. Thus was born one of the world's strangest, and most successful, money-management systems.
Today, each fund's mammoth portfolio--its Investment Co. of America fund alone teeters at $25.7 billion--is split among three to 11 managers. A quarter or so of each fund is reserved for the company's 65-member research staff to manage. (Imagine, analysts get to pick stocks!) Each manager typically works on several funds and may buy and sell as he or she sees fit, taking care to remain faithful to a fund's basic philosophy as well as various guidelines. Does all this cross-managing lead to mass confusion?
No, because an investment-review department oversees buy and sell decisions and keeps managers from tripping over one another. Explains senior vice president William Grimsley: "The system may seem cumbersome, but it works."
Apparently so. Capital Research has three of the ten largest stock mutual funds and ranks as the third-largest fund manager in the U.S.
Over the years the company has cooked up a lot of ideas that are now truisms, such as that most investors should put their money in stocks (some 70% of assets are equity) and should diversify by investing overseas (the company's EuroPacific Growth helps it top the five-year foreign ranking). Low stock turnover of under 30% a year marks Capital Research as a buy-and-hold investor, and it has figured out how to make conservatism pay. Says Investment Management Weekly editor Richard Chimberg: "It has the right blend of product for middle America." "
Source of this EXACT Quote:
http://money.cnn.com/magazines/fortune/fortune_archive/1996/08/19/215606/index.htm
Posted by Crystal L. Cox
Investigative Blogger
Industry Whistleblower
