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Advisor Blog

American Funds: $81.5B Outflow in 2011

Posted by Brent Everett
Brent Everett
Brent Everett founded Profisys, LLC, a fee-only Registered Investment Advisor, in 1998. While acting as Manag...
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on Tuesday, January 17, 2012
in Unconventional Wisdom

According to a January 16 article in Investment News, investors withdrew a net $81.5 billion from American Funds in 2011, including a net outflow of more than $33 billion for the company's flagship product, Growth Fund of America. No other mutual fund even came close to matching that amount of outflow. In fact, there was not an entire fund family that matched the outflow of just this fund. Fidelity Investments came closest with outflows of $28 billion. According to Morningstar, Inc. analyst Kevin McDevitt, Growth Fund of America ranked in the bottom 25th percentile of all large-cap growth funds for 2011.

A few years ago, we heard a lot about American Funds and it seemed that almost every brokerage firm was pushing them. I remember going to a local Chamber of Commerce meeting where there were three representatives from different local offices of the same brokerage firm - all singing the praises of American Funds.

In 2011, investors showed a strong shift away from actively managed funds. As a result, the Vanguard Group took in $29.5 billion in mutual fund inflows, the most of any mutual fund family. Could it be that a larger group of individual investors has finally caught on to the fact that active management is an expensive failed strategy?

Brent Everett founded Profisys, LLC, a fee-only Registered Investment Advisor, in 1998. While acting as Managing Director of that firm, he developed the investment philosophy and the portfolio models currently used by Talis Advisors. He earned a B.S. in Computing and Information Sciences from Oklahoma State University. Mr. Everett’s background includes experience in strategic marketing, executive management and investor relations at Texas Instruments, Samsung Semiconductor, EDI, CSCI, and his own consulting practice. Brent served on the Board of Directors for CSCI, where he helped structure and negotiate management's successful purchase of the company.

Mr. Everett has been a member of the Financial Planning Association, where he was elected to the Board of Directors of the local chapter, the International Association of Financial Engineers, the Econometrics Society, the Association of Pension Professionals and Actuaries Benefits Council, the Estate Planning Council of North Texas and Mensa. He has discussed small cap stock investing on CNNfn and his views regarding investment advisor disclosure have been quoted by several major publications. Along with Scott Maxwell, Brent has been the cohost of The Peaceful Wealth Radio Hour on CNN. He was named as one of Texas Monthly magazine's "5 Star" wealth managers in 2010 and 2011 and one of D Magazine's top wealth managers in 2010.

Mr. Everett lives in Plano with his wife and their Labrador Retreiver. He has served as a member of the Business and Professional Leadership Committee of the Plano Symphony Orchestra, and enjoys reading, fly fishing, college sports, and Formula One racing.

Comments

Guest
Frank Tuesday, January 17, 2012

Could it also be that more companies are moving their 401k plans away from actively managed funds?

Brent Everett
Brent Everett
Brent Everett founded Profisys, LLC, a fee-only Registered Investment Advisor, in 1998. While acting as Manag...
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Brent Everett Tuesday, January 17, 2012

I certainly think that could be a factor. More plan sponsors are realizing that low-cost passive investment options should be made available to participants.

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Guest
Guest Sunday, May 20, 2012