American Funds Fundamental Investors® Class F-3 FUNFX

American Funds Fundamental Investors allows its talented managers the flexibility to play to their strengths, making it a good option for investors.

Capital Group recently completed its latest periodic firmwide self-assessment, which will result in personnel changes across its fund lineup, and while this strategy is impacted, the adjustments aren’t substantial. On Jan. 1, 2026, Julian Abdey will cease managing his roughly 10% sleeve of the strategy. Additionally, Franco Tapia and Brant Thompson will be disclosed as managers. While Abdey is an experienced investor and has been on the strategy for seven years, Thompson has a similar tenure in the industry and has been a manager on another large-cap strategy for more than six years, so there is not a big loss of expertise. Tapia has previous management experience at Pzena Investment Management and BlackRock. He also has been managing money in an undisclosed role on the strategy since February 2022.

This strategy remains in experienced hands and should be set up well going forward. Veteran investor Mark Casey heads up the management team of Brady Enright, Paul Benjamin, Mathews Cherian, Diana Wagner, Dimitrije Mitrinovic, Irfan Furniturewala, and Julian Abdey. The strategy has a mix of veterans and up-and-comers, which should bode well for team stability and continuity going forward.

This is one of the firm’s most flexible large-blend mandates. The managers aren’t afraid to stand out from the S&P 500 prospectus benchmark, and their ability to invest abroad is possibly the biggest differentiator. Its 18% allocation to non-US companies landed it in the top 5% of large-blend Morningstar Category peers as of September 2025. The managers try to limit their non-US investments to companies that have no equivalent domestic alternative. For example, as of September 2025, the portfolio held sizable stakes in leading semiconductor firm Taiwan Semiconductor Manufacturing and South Korean memory maker SK Hynix. While the managers’ rationale is reasonable, their penchant for foreign stocks has hurt as the strategy’s lagged the US market for much of the past decade.

However, international exposure has helped this year and boosted short-term results. So far in 2025 through October, the fund has landed in the category’s top decile and handily outperformed the prospectus S&P 500 benchmark and the Russell 1000 Index large-blend category benchmark. Tech picks have been especially strong with bets in Micron Technology, Broadcom, and SK Hynix leading the way. Additionally, holdings in tobacco companies Philip Morris and British American Tobacco have performed well.

This strategy's flexible mandate has often made it American Funds' most aggressive large-blend domestic offering, which shows in distinct industry and country positions. Unlike most of the shop's large-cap strategies, this one doesn't have to maintain a yield greater than the S&P 500's. Management tries to keep the strategy's overall preexpense yield within 80% to 100% of the benchmark. That gives the managers leeway to invest in high-octane growth stocks, deep-value plays, or more steady dividend payers.

The strategy can also invest up to 35% of its assets abroad. The managers usually buy globally dominant companies that have few domestic equivalents. This tends to be the case in materials and natural resources stocks, for example. They also often invest in international companies that have higher yields than their US counterparts.

Capital Group's multimanager approach lets the managers play to their strengths. With distinct styles, they can invest in their best ideas or hold cash to wait for compelling opportunities. Meanwhile, the combination of separately managed sleeves mutes the overall portfolio's volatility. The firm typically prefers that managers hold investments for the long term and incentivizes them appropriately, giving them the conviction to hold promising stocks that may take several years to work out.

All told, the strategy’s flexibility, breadth, and structure earn it an Above Average Process rating.

The managers have made an effort to focus on their highest-conviction picks recently. The strategy peaked at roughly 340 holdings in mid-2021, but as of September 2025 the portfolio was down to roughly 225 stocks. The strategy’s allocation to its top 10 holdings has increased in stride to 35% of assets, which was slightly below the S&P 500’s mark.

The portfolio’s sector over- and underweightings versus the S&P 500 are less pronounced than in the past but still clearly reflect the team’s bets. The portfolio's helping of materials companies peaked at 13.5% of assets in late 2003, then 10.5 percentage points more than the index, while its financials underweighting hit double digits in 2006 and again in 2007. Sector bets have been a bit more restrained in recent years. For example, as of September 2025, the strategy’s technology underweighting was its largest at 5.4 percentage points, while its industrials overweighting was the largest at 6.1 percentage points. The portfolio also displays moderate differentiation at the industry level. In September 2025, for example, ’s 15%-plus bet on semiconductors was roughly 4 percentage points more than the index. Five of the top 15 holdings were in semiconductor firms, with top holding Broadcom leading the pack.

The portfolio's typically double-digit weighting in non-US stocks also stands out. Foreign-equity exposure peaked at roughly 30% of assets in late 2007, which was then more than all but a few peers. As of September 2025, its 18% allocation was well below that mark but still landed in the top 5% of large-blend category peers.

This strategy benefits from the strengths of American Funds’ multimanager system, its managers’ decades of experience, and their mutual fund ownership. It earns an Above Average People rating.

Capital Group recently completed a firmwide self-assessment, which will result in personnel changes across its fund lineup including this strategy. On Jan. 1, 2026, Julian Abdey will come off. Additionally, Franco Tapia and Brant Thompson will be disclosed as managers. While Abdey is an experienced investor and has been on the strategy for seven years, Thompson has a similar tenure in the industry and has been a manager on another large-cap strategy for more than six years, so there is not a big loss of expertise. Tapia has previous management experience at Pzena Investment Management and BlackRock and has 18 years of industry experience. He has also been managing money in an undisclosed role on the strategy since February 2022. Abdey ran roughly 10% of assets, which will be distributed among Tapia, Thompson, and the remaining managers.

The remaining managers are experienced hands. This strategy has been run by equity subsidiaries Capital International Investors and Capital World Investors since mid-2018. Brady Enright leads CWI’s team of Paul Benjamin, Mathews Cherian, Diana Wagner, and Dimitrije Mitrinovic. Mark Casey heads up the whole fund and CII’s crew of Abdey and Irfan Furniturewala. Mitrinovic will switch subsidiaries to CII at the beginning of the year; while he will have to get comfortable with a new analyst team, he’ll still have access to a deep pool of resources.

All managers have a decent runway before they hit the usual retirement window, which should give this lineup stability, and most named managers are impressive. CWI’s Cherian, for example, made major contributions in his nine years as an analyst, including recommending top-five holding Broadcom. The fund’s soon-to-be nine-person team includes a good mix of long-tenured veterans and relative newcomers. The managers are supported by a deep research team of more than 100 analysts across two subsidiaries.

All eight current managers invest more than USD 1 million in the fund.

Capital Group stands out from the pack as it enhances capabilities around strong core competencies. It earns a High Parent rating.

Since 1931, Capital Group, parent of American Funds, has thoughtfully built out capabilities to become one of the world’s largest asset managers, managing more than USD 3 trillion dollars. Building on the success of its long-term-oriented, multiple-manager system for global equities, the firm has developed robust fixed-income and multi-asset units, each managing more than USD 500 billion. In January 2026, as part of its periodic review of its now five distinct research organizations, Capital Group implemented changes to its equity investment subsidiaries. This exercise resulted in most equity strategies having at least one portfolio manager change, but according to the firm, it better balances each of Capital Group’s three equity groups in terms of investment breadth and helps the firm better align leadership opportunities across the groups. These kinds of shifts have occurred before, with the last coming in 2018.

Capital Group has also turned its attention to some modern opportunities. To address public/private market convergence trends, it launched in April 2025 two semiliquid funds with private market giant KKR. In keeping with its signature portfolio management approach, it splits those funds into multiple sleeves, which are managed independently by distinct managers at each firm. Capital Group plans to deepen this relationship with target-date and model portfolios, as well as public/private equity funds. On the other end of the spectrum, although the firm is firmly dedicated to active management, it has also acknowledged investor preference for passive investing and has thus partnered with indexing stalwarts Vanguard, BlackRock, and Schwab on active/passive models. Capital Group’s proven investment prowess, strong reputation among investors, and scale mean it can be selective with its partnerships.

In addressing another recent trend, since early 2022, the firm has launched more than 25 active exchange-traded funds globally, most of which are distinct, but several are similar to some of its legacy American Funds mutual funds. Unlike some of its peers, though, it has not filed for SEC exemptive relief to offer ETFs as a share class.

That’s a lot of change for such a storied and sizable firm, but Capital Group has a long history of serving investors well.

The fund has delivered competitive results over the long term. For the past 20 years through October 2025, the strategy posted returns in line with its prospectus S&P 500 benchmark and the Russell 1000 Index category benchmark. It has handily outperformed the large-blend category average.

After a long stretch of middling performance, recent results have been strong. From the 2007 global financial crisis through 2021, the fund struggled to gain any ground on both indexes. Yet, things turned around in 2022 as the R6 shares bested the S&P 500 by 1.7 percentage points. It also held its ground in 2023 and 2024. So far in 2025 through October, the fund has landed in the category’s top decile and handily outperformed both indexes. Tech picks were especially strong with bets in Micron Technology, Broadcom, and SK Hynix leading the way. Additionally, tobacco companies Philip Morris and British American Tobacco helped, as did as exposure to foreign-domiciled stocks, which flipped from a headwind to a tailwind in 2025. As of October 2025, the fund landed in the category’s top 15% across the trailing one-, three-, and five-year periods.

The strategy has typically been less volatile than the S&P 500. It held up better than the index in late 2018’s correction and in 2022. In 2025’s first quarter pullback, the fund lost less than both indexes, thanks to defensive picks like Philip Morris.

American Funds Fundamental Invs F-3's Prospectus Adjusted Expense Ratio is 0.28% per year. It places it in the cheapest quintile of the Morningstar US Fund Large Blend Category, where the median fee is 0.67% per year. This cost positioning translates into a Medalist Rating Price Score of 1.53, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.