IS the American FUnds... Growth Fund of AMerican Mutual Fund "too big for its own good"??????

Question

It is the largest Mutual Fund..... is being that BIG actually a disadvantage in the long run? Tough to make any large moves with its assets if THEY THEMSELVES own so much that by moving shares they actually control in some aspect the price. Should one stay away from it despite above average returns in the past?

Answer 1

I have owned CWGBX for the last 5 years.  I bought in at approx $21 share and it is now $38.  It was up to $43 share before the recent decline in the entire market.  American Funds is great for long term growth.

Answer 2

You would think that huge funds like this one would have a big disadvantage (for the reasons you mention), but empirical evidence shows otherwise.  Most large funds have continued to do well relative to the broader market, despite their size.

If you're concerned, you can use this fund for just a portion of your assets, and/or dollar-cost average (DCA) your investment so that you can take advantage of market downturns during your DCA period.

I hope that helps - good luck.