Which Stock Picks Have Worked for the American Funds AMCAP Fund so far in 2016?


Jul. 22 2016, Published 6:52 p.m. ET

Performance evaluation

The American Funds AMCAP Fund Class A (AMCPX) has risen by 5.3% YTD (year-to-date) in 2016—the highest among the 12 funds we’ve selected for this review. The past month has been quite poor for the fund, but in the one-year period, the fund has placed fifth among its peer group of 12.

We have graphed its performance against two ETFs: the iShares S&P 500 Growth ETF (IVW) and the iShares Russell 1000 Growth ETF (IWF). Let’s look at what has contributed to this superlative performance by AMCPX YTD in 2016.

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Portfolio composition and contribution to returns

The energy sector has contributed the most to AMPCX’s total returns YTD in 2016 until July 15. Canadian Natural Resources (CNQ) has fueled the sector. But it hasn’t been alone—Concho Resources (CXO), Halliburton (HAL), and EOG Resources (EOG) have helped. The fund managers’ decision to increase exposure to energy stocks has also helped the fund.

Information technology stocks have been sizable contributors to the fund as well. Oracle (ORCL) has led the sector, and other major positive contributors include Texas Instruments Incorporated (TXN), Accenture (ACN), and Broadcom (BRCM). There have been a few detractors—namely, Skyworks Solutions (SWKS) and Zebra Technologies (ZBRA). But they haven’t been much of a bother to the fund. The fund manager picks from the materials sector have also paid off—specifically, Albemarle (ALB).

An important aspect of the fund’s performance has been that no sector has dragged on the fund’s returns. Stock picks from financials have been able to eke out gains, and though the performance of utilities has not been great, they haven’t contributed negatively.

Investor takeaway

For the most part, 2016 has been quite good for AMCPX so far. It’s done better than the passively managed SPDR S&P 500 ETF (SPY), and this has been a relief to investors who witnessed a poor performance by the fund in 2015. Its stock picks have delivered, and things are looking up. Right now, investors should consider staying invested, whereas prospective investors would perhaps do well to keep this fund on their shortlists for investing in US equities.

Now let’s move on to the second fund in this review: the Fidelity Blue Chip Growth Fund (FBGRX).


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