Although it's the world's top-selling fund manager on the retail side, Los Angeles-based Capital Group has suffered institutional outflows of more than $40 billion, The Financial Times reports.

American Funds, which is Cap Group's retail mutual fund subsidiary, had net inflows of $80 billion in 2005, making it the best-selling mutual fund group for the fourth straight year.

But Capital Group International, which manages its institutional business, suffered a drop in assets under management from $317 billion in 2004 to $305 billion in 2005.

Chuck Freadfoff, a company spokesman, said that two years ago the firm took action to fix its international performance. Last year, he said, returns were 20%, easily above the world market return of 14%.

"There were a couple of years from 2002, where our results in international equities were not what we would have liked," he said. "We encourage our clients to look at five-year and 10-year performance."

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.