Amcap Fund: Unlocking Investment Opportunities

The American Funds AMCAP Fund (AMCPX) is a mutual fund that has been offering investments since 1934. The fund primarily invests in common stocks of well-managed U.S. companies with solid long-term growth records and future growth potential. It takes a disciplined approach to growth investing and focuses on companies with sound fundamentals. The fund may also invest in securities outside the U.S. to a limited extent. As of September 2022, 85.2% of the fund's net assets were invested in U.S. equities, with the rest in non-U.S. equities and cash. The fund seeks to provide long-term growth of capital for investors.

The AMCPX fund

The fund's top holdings include well-known companies such as Netflix (NFLX), Microsoft (MSFT), Meta (META), Abbott Laboratories (ABT), Alphabet (GOOG), and Amazon.com (AMZN). As of November 27, 2023, the fund had assets totaling almost $73.29 billion invested in 211 different holdings.

In terms of performance, the AMCPX fund has delivered solid returns. As of September 30, 2024, the fund's 1-year return was 35.77%, its 5-year return was 13.08%, and its 10-year return was 11.08%. The fund's expense ratio is 0.67%.

Long-term growth of capital

The investment objective of the American Funds AMCAP Fund is to provide long-term growth of capital. The fund primarily invests in common stocks of well-managed U.S. companies of any size with solid long-term growth records and attractive future growth potential. This disciplined approach to growth investing includes investing in companies with sound fundamentals and strong balance sheets, contributing to a competitive risk profile.

The fund's flexibility in market capitalisation, investing in both large-cap and mid-cap companies, allows it to maintain sizable positions in mid-cap stocks despite its growing size. As of September 2022, large-cap firms made up 69.1% of the portfolio, while mid-cap firms accounted for 25.4%. The fund's top holdings include well-known companies such as Netflix, Microsoft, Meta, Abbott Laboratories, Alphabet, and Amazon.com.

AMCAP's investment strategy also involves investing in foreign equities to a limited extent. As of September 2022, 85.2% of the fund's net assets were invested in U.S. equities, while 6.7% were invested in non-U.S. equities, primarily in Europe and the Asia-Pacific region.

The fund has a long-term legacy of success, outperforming its peers 86% of the time over the past 30 years. It has also maintained a lower expense ratio compared to its peer group, contributing to its competitive advantage.

Investment in US stocks

The AMCAP Fund (AMCPX) is a mutual fund that has been offering investments since 1934. The fund's investment objective is to provide long-term growth of capital. It takes a disciplined approach to growth investing, focusing primarily on well-managed U.S. companies with sound fundamentals.

The fund primarily invests in U.S. common stocks, as well as convertible preferred stocks and cash and equivalents. As of September 2022, 85.2% of the fund's net assets are invested in U.S. equities, with large-cap firms making up 69.1% of the portfolio, mid-cap 25.4%, and the average capitalization size is $98.52 billion.

The three largest sectors of investment in U.S. stocks are information technology, healthcare, and communication services. Information technology accounts for 24.6% to 27.7% of assets, healthcare accounts for 20.8% of assets, and communication services account for 9.9% to 15.8% of assets.

The fund's top holdings in U.S. stocks include Meta (formerly Facebook), Alphabet (Google), Microsoft, and Amazon.com. Other notable holdings include Netflix, Gilead Sciences, Amgen, and Oracle.

The AMCAP Fund has a history of providing solid returns, outperforming its peers 86% of the time over the past 30 years. It has returned 11.72% over the past year, 4.02% over three years, 7.24% over five years, and 8.90% over the past decade.

With a skilled management team, a long-term investment horizon, and a focus on growth-oriented stocks, the AMCAP Fund offers a decent all-cap growth investment option for those looking for long-term capital appreciation.

Investment in foreign equities

The AMCAP Fund primarily invests in U.S. common stocks, convertible preferred stocks, and cash and equivalents. However, it may also invest in securities outside the U.S. to a limited extent. As of September 2022, 6.7% of the fund's net assets were invested in non-U.S. equities, mainly in Europe and Asia and the Pacific Basin.

Investing in foreign equities provides an opportunity to diversify one's portfolio and access a wide range of foreign securities. International stocks can help investors manage risk and position their portfolios for long-term growth. By investing in both U.S. and international stocks, investors can reduce the volatility in their portfolios as markets outside the United States do not always move in tandem with the domestic market.

However, investing in foreign equities also carries unique risks. Currency fluctuations, political instability, and regulatory changes in foreign countries can impact investment returns. Additionally, international investments may be subject to different tax rates and regulations. It is important for investors to carefully consider these factors when deciding whether to invest in foreign equities.

Overall, investing in foreign equities can provide benefits such as diversification and access to emerging markets, but it also comes with certain risks and considerations that investors need to take into account.

Management of the fund

The American Funds AMCAP Fund (AMCPX) is managed by Capital Group, America's ninth-largest asset management firm, with $2.7 trillion in assets under management (AUM) as of March 2022. The fund itself has $68.48 billion in AUM as of September 2022, which has grown to $73.29 billion as of November 27, 2023, and $89.57 billion as of October 25, 2024.

The fund's investment objective is to provide long-term growth of capital, and it takes a disciplined approach to growth investing. It primarily invests in well-managed U.S. companies of any size with solid long-term growth records and attractive future growth potential. The fund may also invest in securities outside the U.S. to a limited extent.

The fund is managed by a team of analysts and portfolio managers. As of September 2022, the fund's managers had an average tenure with Capital Group of 26 years and an average of eight years with the Amcap Fund. The fund's principal investment officer is Claudia Huntington, who has been with the fund since the 1990s. Other managers include Barry Crosthwaite, Eric Richter, James Terrile, and Bradley Vogt.

The fund operates using a multi-manager system, with each portfolio manager and analyst assigned a portion of the fund's assets to invest. This approach is designed to foster individual responsibility and improve results. Managers often hold positions for five years or more, allowing them to take a long-term approach to their investment strategies.

The fund's disciplined growth strategy has been successful, with returns outperforming its peers 86% of the time over the past 30 years, ending December 31, 2022. Its combination of market cap flexibility and a focus on strong balance sheets has contributed to a competitive risk profile. The fund has also maintained strong performance relative to the S&P 500 and Russell 1000 Growth indexes.

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