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Deep Dive: $147 billion mutual fund’s performance makes a case for active management

(This is the first story in a two-part series on active versus passive fund management using American Funds as an example. Part two will be published Oct. 21.)

Everyone knows by now that index funds outperform actively managed mutual funds, right?

Not so fast.

Even a big fund — in fact, the biggest — can outmaneuver a simple benchmark index like the S&P 500. American Funds’ Growth Fund of America AGTHX, +0.50% which has a staggering $147 billion in assets, has surpassed the S&P 500 for periods ranging from five to 25 years.

Jacob Gerber, who works with the 12 portfolio managers of the Growth Fund of America, said the fund has increased its positions in beleaguered energy companies.

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