Capital Group is an American

financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...

company. It ranks among the world's oldest and largest

investment management Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...

organizations, with over $2.6 trillion in assets under management. Founded in

Los Angeles Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...

California California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...

in 1931, it is privately held and has offices around the globe in the

Americas The Americas, which are sometimes collectively called America, are a landmass comprising the totality of North and South America. The Americas make up most of the land in Earth's Western Hemisphere and comprise the New World. Along with th ...

Asia Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an area ...

Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

and

Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...

. Capital offers a range of products focused on

active management Active management (also called ''active investing'') is an approach to investing. In an actively managed portfolio of investments, the investor selects the investments that make up the portfolio. Active management is often compared to passive man ...

, including more than 40 mutual funds through its

subsidiary A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a s ...

, American Funds Distributors, as well as separately managed accounts (or collective

investment trust An investment trust is a form of investment fund found mostly in the United Kingdom and Japan. Investment trusts are constituted as public limited companies and are therefore closed ended since the fund managers cannot redeem or create shares. ...

s),

private equity In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a ty ...

, investment services for high

net worth Net worth is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities. Since financial assets minus outstanding liabilities equal net financial assets, net ...

investor An investor is a person who allocates financial capital with the expectation of a future Return on capital, return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some specie ...

s in the U.S., and a range of other offerings for institutional clients and individual investors globally.

History

In 1931,

Jonathan Bell Lovelace Jonathan Bell Lovelace (1895–1979) was the founder of Capital Group Companies. Early life Jonathan Bell Lovelace was born in 1895. He grew up in Brewton, Alabama and attended Auburn University. Career Lovelace spent most of the 1920s at a Det ...

founded the investment firm, ''Lovelace, Dennis & Renfrew'', which would eventually become Capital Group. Lovelace had previously been a partner in the

stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

brokerage firm A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confu ...

''E.E. MacCrone'', where he explored the concept of developing an open-end mutual fund. He eventually sold his stake in that company, just before the

Wall Street Crash of 1929 The Wall Street Crash of 1929, also known as the Great Crash, was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended late in October, when share prices on the New York Stock Exchange colla ...

. In 1933, Lovelace's firm took over management of ''The Investment Company of America'', which he had launched at E.E. MacCrone in 1927. For the next 20 years, his firm enjoyed modest success. As

mutual fund A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV i ...

s gained in popularity in the 1950s, Capital's roster of mutual funds grew. The International Resources Fund, established in 1954, was Capital's first

foray A foray ( pl, zajazd, be, наезд, uk, наїзд) was a traditional method of law enforcement in Grand Duchy of Lithuania and Polish–Lithuanian Commonwealth. In view of the weakness of the executive in the Polish-Lithuanian Commonwealth, ...

into international investing. A year earlier, Lovelace had established an international investment staff at the urging of his son, Jon Lovelace Jr. The establishment of the firm's first overseas research office in Geneva followed in 1962. In 1958, Jon Lovelace Jr. introduced a new system of managing the firm's mutual funds and accounts. Rather than assign a portfolio to a single manager, he divided each portfolio among several managers. Each manager would share ideas with peers but have total

discretion Discretion has the meaning of acting on one's own authority and judgment. In law, discretion as to legal rulings, such as whether evidence is excluded at a trial, may be exercised by a judge. Some view discretion negatively, while some view it ...

over a section of the portfolio. Known today as The Capital System, it avoids the

phenomenon A phenomenon ( : phenomena) is an observable event. The term came into its modern philosophical usage through Immanuel Kant, who contrasted it with the noumenon, which ''cannot'' be directly observed. Kant was heavily influenced by Gottfried W ...

of creating single-manager "stars," who can impact a fund's results should they leave. In the mid-1960s, Capital began to include research analysts in the management of the portfolios, reserving a portion of each to allow analysts to pursue their highest conviction investment ideas. Capital Group's long-term approach has helped it avoid some of the pitfalls that have plagued other firms. In the late 1990s, the firm was criticized for not offering then-popular tech funds. But when the tech bubble burst, Capital was praised for not jumping on the bandwagon. Former British PM

Theresa May Theresa Mary May, Lady May (; née Brasier; born 1 October 1956) is a British politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 2016 to 2019. She previously served in David Cameron's cab ...

's husband

Philip May Sir Philip John May (born 18 September 1957) is an English investment manager. He is the husband of Theresa May, who was Prime Minister of the United Kingdom from 2016 to 2019. Early life May was born in Norwich in 1957. His father was a sales ...

has worked as a relationship manager for the Capital Group.

Investments

As of 2019, Capital Group held 5% of

BAE Systems BAE Systems plc (BAE) is a British multinational arms, security, and aerospace company based in London, England. It is the largest defence contractor in Europe, and ranked the seventh-largest in the world based on applicable 2021 revenues. ...

, 9% of

British American Tobacco British American Tobacco plc (BAT) is a British multinational company that manufactures and sells cigarettes, tobacco and other nicotine products. The company, established in 1902, is headquartered in London, England. As of 2019, it is the large ...

, and 15.28% of

ASML Holding ASML Holding N.V. (commonly shortened to ASML, originally standing for Advanced Semiconductor Materials Lithography) is a Dutch multinational corporation founded in 1984. ASML specializes in the development and manufacturing of photolithograph ...

Leadership

The chairman and

chief executive A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...

is Tim Armour, who took over in 2015 after the death of James Rothenberg.

Strategies

Funds typically have between 3 and 13 managers; in addition to financial research, the managers may do on-the-ground due diligence, and in 2018 logged 12,400 to facilities such as

factories A factory, manufacturing plant or a production plant is an industrial facility, often a complex consisting of several buildings filled with machinery, where workers manufacture items or operate machines which process each item into another. T ...

. It has 3 independent divisions focused on equities: Capital World Investors, Capital Research Global Investors and Capital International Investors, as well as 1 focused on bonds, Capital Fixed Income Investors.

Funds

As of 2019, it had 36 funds. Growth Fund of America, founded in 1973, was the largest actively-managed fund as of 2020 with around $150 billion.

Ownership

As of 2019, the company is owned by 450 partners.

Offices

Capital Group employs more than 7,500 associates worldwide.

North America North America is a continent in the Northern Hemisphere and almost entirely within the Western Hemisphere. It is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South America and the Car ...

n locations include

Atlanta Atlanta ( ) is the capital and most populous city of the U.S. state of Georgia. It is the seat of Fulton County, the most populous county in Georgia, but its territory falls in both Fulton and DeKalb counties. With a population of 498,715 ...

, Los Angeles,

San Antonio ("Cradle of Freedom") , image_map = , mapsize = 220px , map_caption = Interactive map of San Antonio , subdivision_type = Country , subdivision_name = United States , subdivision_type1= U.S. state, State , subdivision_name1 = Texas , s ...

Indianapolis Indianapolis (), colloquially known as Indy, is the state capital and most populous city of the U.S. state of Indiana and the seat of Marion County. According to the U.S. Census Bureau, the consolidated population of Indianapolis and Marion ...

New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...

San Francisco San Francisco (; Spanish language, Spanish for "Francis of Assisi, Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the List of Ca ...

Toronto Toronto ( ; or ) is the capital city of the Canadian province of Ontario. With a recorded population of 2,794,356 in 2021, it is the most populous city in Canada and the fourth most populous city in North America. The city is the ancho ...

and

Washington, D.C. ) , image_skyline = , image_caption = Clockwise from top left: the Washington Monument and Lincoln Memorial on the National Mall, United States Capitol, Logan Circle, Jefferson Memorial, White House, Adams Morgan, ...

As part of expansion plans in Europe, Capital Group established a presence in

Frankfurt Frankfurt, officially Frankfurt am Main (; Hessian: , "Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on its na ...

Madrid Madrid ( , ) is the capital and most populous city of Spain. The city has almost 3.4 million inhabitants and a metropolitan area population of approximately 6.7 million. It is the second-largest city in the European Union (EU), and ...

Milan Milan ( , , Lombard: ; it, Milano ) is a city in northern Italy, capital of Lombardy, and the second-most populous city proper in Italy after Rome. The city proper has a population of about 1.4 million, while its metropolitan city h ...

and Zurich, adding to its offices in

Geneva Geneva ( ; french: Genève ) frp, Genèva ; german: link=no, Genf ; it, Ginevra ; rm, Genevra is the List of cities in Switzerland, second-most populous city in Switzerland (after Zürich) and the most populous city of Romandy, the French-speaki ...

London London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...

and

Luxembourg Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=no, Grand-Duché de Luxembourg ; german: link=no, Großherzogtum Luxemburg is a small lan ...

. Its Asia offices include

Beijing } Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 21 ...

Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...

Mumbai Mumbai (, ; also known as Bombay — the official name until 1995) is the capital city of the Indian state of Maharashtra and the ''de facto'' financial centre of India. According to the United Nations, as of 2018, Mumbai is the second- ...

Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...

and

Tokyo Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, with an estimated 37.468 ...

. Capital Group also has a growing presence in

Sydney Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mountain ...

.Smith, Mark (December 1, 2014). Capital Group expands retail sales team. ''Financial Standard''

References

External links

* {{Authority control Financial services companies established in 1931 Investment management companies of the United States Companies based in Los Angeles American companies established in 1931 1931 establishments in California Privately held companies based in California