Flying High

A former American Airlines division, American Beacon Advisors thrived by expanding its asset management business during the financial market meltdown

Among American Beacon’s overachievers was its large-cap value fund, AMR Class (AAGAX), which won the 2010 Lipper Fund Award for the Best Large Cap Value Funds category for the 10-year period ended Dec. 31, 2009. The fund beat out 185 funds for the award, returning 5.2% as of Dec. 31, 2009, while the S&P 500 returned 0.45%. “Consistency, low cost, attention to detail are the real value propositions we bring to clients and we’re able to take a lot of their workload off of them and their investment committees because of what we do,” says Needles. “We may not have had some of those high highs as some of those single managers but we didn’t give up as much as they might have in certain markets.”

Morningstar agrees. “They’re really looking for highly reputable, skilled managers that have a repeatable process and don’t have a lot of volatility in their funds,” says Ryan Leggio, an analyst for the mutual fund tracker. Leggio points out that nearly all American Beacon’s funds earned an above-average Morningstar rating of three or four stars. “It’s a fine firm that’s very conservatively managed and has done very well for shareholders.”
Even with the market turbulence, Youngblood has no regrets about closing the deal. “We purchased the asset at the top of the market, so the timing could have been better,” he says. “But we never looked at this as a quick flip.” Just like the firm’s investment approach, Youngblood is in it for the long haul.

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