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Capital Group miraculously recovered after deep 2008 dive but RIA help may get No. 2 American Funds through the next downturn under new CEO

Matthew O’Connor takes the CEO helm of the giant LA-based active manager from Kevin Clifford with conviction not to jam the rudder hard but to be open to new markets

Author James Picerno November 2, 2018 at 9:26 PM
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Matthew O'Connor: Our aim is simple: to offer investors mutual funds and other investment products that deliver superior results with low fees.

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Biz Briefs: The sorry scene at my local First Republic branch • Schwab launches new (smaller) lay-off round • Schwab hoovers pennies passing FINRA fee to clients • Gensler pleas for funds • Fidelity owner's private equity pres. retires • an Orion-Envestnet staff switcheroo • LPL dumps FutureAdvisor

Range Rovers screeched in and drivers joined a grim queue to get their cash, and cookie • The Schwab-TDA deal cull count now stands at roughly 3.5% of its staff • FMR's hockey star president has stepped down • SEC chief wants more enforcers • An Envestnet executive proves joining a rival is good business • LPL now has an in-house robot.

April 29, 2023 at 1:36 AM

Fidelity will hire 4,000 staff in first half -- a staggering number but a tapering off from 'unprecedented' rate in 2021-2022 that catapulted it to 68,000 employees

The $10.3 trillion giant explains its hiring -- in a layoff environment -- as an RIA-like goal, namely having the human bandwidth to develop 'lifetime' relationships with its 40 million investors

February 17, 2023 at 2:49 AM

Fidelity Investments loses Kathleen Murphy who largely caught up Fido to Schwab (near $4T) on the retail side by reversing net promoter scores

The 'no whining allowed' leader of the Boston giant's retail business, who oversaw $2 trillion in net new assets, was ready to exit but hung in through a year dominated by COVID-19 challenges

January 23, 2021 at 2:02 AM

Capital Group nabs Holly Framsted as it unveils products for 2022 that define how it will stay active in a passive-ETF world

The Los Angeles manager poached BlackRock's head of U.S. ETF product segments (factors) to start in March and oversee the firm's first actively managed exchange-traded funds

January 13, 2021 at 10:14 PM

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Brian Murphy

Brian Murphy

November 2, 2018 — 11:45 PM
Don't confuse growth in AUM with skill. This is purely performance chasing Capital Group's style is growth. They historically have done well in the later stage of market cycles (when growth is favored) and then quickly lose AUM when the sector and their funds get clobbered in the inevitable downturn. Look at their history and compare AUM to market levels...pretty simple. At a deeper level - If you look across all of their equity funds, the overlap in names is chilling and the correlation is high...suggesting that this is a group that has done more on the side of "packaging" and less on the side of developing a series of unique investment strategies. So it's no wonder that the AUM has fluctuated as it has over the years. Given we're setting up for a wicked couple of years, watch for the inevitable downturn. Like every fund management company, Capital Group lives and dies based on capital flows. It's a silly-ass game that is nothing more than shuffling deck chairs on the Titanic - but a $100 billion/year business. How about any one of these companies take part of their marketing budget and come up with the next generation of real financial products instead of just repackaging "passive plus" strategies and trading AUM back and forth throughout the cycle. Maybe an guaranteed income retirement product for starts?

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