American Funds AMCAP Fund (AMCPX)
While not the oldest fund in the stable, the AMCAP Fund (AMCPX) has been a steady performer, achieving an average annual return of 11.6% since its inception in May 1967, more than warranting its place among the Fantastic 51. Four managers, whose average tenure at American Funds amounts to 23 years, manage a total of $39 billion spread across 124 holdings. In a little over three years, those assets under management have more than doubled.
AMCAP’s turnover averages around 30% annually, meaning it turns the entire portfolio every three years, a rate that is lower than many of its other equity-related funds.
Approximately 77% of the portfolio consists of large-cap stocks with an average market cap of $33 billion. Its top 10 holdings are biotech-friendly, with Gilead Sciences (GILD), Biogen Idec (BIIB), Amgen (AMGN) and Alexion Pharmaceuticals (ALXN) taking four of the first seven spots. In fact, biotech stocks represent the biggest industry weighting at 10.5%, almost double the next biggest — software — at 5.8%.
AMCPX has an annual expense ratio of 0.74%, or just $74 annually for every $10,000 invested — 58 basis points lower than the Lipper Growth Funds Average. It also requires a tiny minimum investment of $250. However, worth noting is the 5.75% sales load — something that will really eat into returns unless you plan on holding over the long term.
Still, this is one fund that American Funds won’t be putting out to pasture anytime soon.