Sales of American Funds have outpaced competitors for the past five years. In each of the years 2005 and 2006, the fund shop took in more than $73 billion. But that’s likely to stop in 2007, the firm predicts, Investment News reports.
“Those [sales] data points are as cyclical as market results,” rationalizes Drew Taylor, vice president and manager of the analytical services group at American Funds’ investment advisor, Capital Research. “Our five-year relative figures will come right back in line with everyone else.”
While Taylor didn’t point out the five-year performance of his firm’s funds, it is now in line with competitors Fidelity and Vanguard. And that should certainly make advisers think twice before recommending American Funds over those choices.
But Taylor did concede that American Funds doesn’t tend to do well in bull markets, and the market has been strong in recent years.
However, not all analysts, consultants or financial advisers believe this might be the case. Lipper senior analyst Tom Roseen calls the prophesy “false modesty.”
“I’ve been to the adviser conferences,” Roseen said, “and American Funds is on the tip of everyone’s tongue.”