Mutual Funds: Capital Group Isn't a Household Name, but Billions of Dollars Keep Pouring In
What's the biggest mutual fund group that most investors have never heard of?</br></br>Mutual-fund giants Fidelity Investments and Vanguard Group may be household names. But since the 1987 stock market crash, investors have poured more money into the conservative stock funds run by Capital Group Inc., a Los Angeles money manager that deliberately keeps a very low profile.</br></br>Capital Group, through its mutual-fund arm American Funds Group, operates two of the nation's three largest stock mutual funds. With $50 billion in total stock mutual funds, Capital Group ranks second only to Fidelity's $65 billion.</br></br>Yet, few investors have ever heard of Capital Group. Its funds don't advertise; instead, they are "load" funds that carry a sales commission and are sold only through stockbrokers and financial planners.</br></br>"They're the silent giant," says John Rekenthaler, a mutual-fund analyst at Morningstar Inc. in Chicago. He adds: "These guys are dynamite in the brokerage community, the most respected name of the independent load fund groups." A study by Sanford Bernstein & Co. indicates that Capital Group grew faster between 1986 and 1991 than any other major fund group.