The Capital Group is one of the world’s leading investment management firms and home of the American Funds. In July of 2015, the Capital Group’s Board of Directors elected Tim Armour as the new Chairman of the Capital Group. At the time, Tim was Chairman of Capital Group’s management committee and Capital Research and Management company. This change in management had been planned for awhile and was finalized after the passing of the former Chairman, Jim Rothenberg.
Tim Armour graduated with a bachelor’s degree in economics from Middlebury College. He then started his career in the Associates Program at Capital Group. He has gone on to have a 33+ year career at Capital Group. Staying at one company for so many years is almost unheard of these days. In his thirty-three years of investment experience at Capital Group, he has been an equity portfolio manager and an equity investment analyst where he covered global telecommunications and U.S. service companies.
Many people place their money in index funds, that passively just try and match the market’s returns. Tim Armour believes that an actively managed fund can bring investors higher and better returns, but that the managers of those funds must earn their keep. An active manager can look for value in places to help investors find and achieve better than market average returns over a long period of time. In turbulent markets, those active managers can guide their funds and investors to success in finding the value in a down market.
Active managers must spend their time researching companies. Tim believes they should be doing an in-depth analysis of each company they are considering or are invested in, and recognize each company’s future prospects for making money for their investors. They should be meeting with experts in the areas of expertise those companies to determine what the future of that field is. A financial analysis needs to be done to understand the risk and rewards trade-off for each company they are invested in.
Doing better than the markets in good and bad times, and protecting your investors from the downside, is a critical part of an active manager’s job. An active portfolio manager must earn their keep by giving their investors better than average market returns. They need to be doing their research and giving their investors a reason to keep paying them the fees for their services.
Click here to learn more about Tim Armour and the Capital Group.