Like a classically tailored suit, American Express Asset Management's performance style has not gone out of fashion for 25 years.
For 19 of the last 23 years (the first one wasn't a full year; the 25th year isn't over yet), AmEx has beaten the Standard & Poor's 500 Index. And, it's the only large-cap growth manager with such a track record against the S&P, according to Callan Associates' Equity database of 51 managers.
President and Chief Executive Officer Steve Roszell attributes the firm's success to its "style for all seasons." That style consists of a top-down sector rotation approach that has remained in place since the inception of its large-cap growth equity portfolio.
The $8.7 billion portfolio started with only $117.7 million in assets. Currently, the portfolio is 400 basis points behind the S&P, but is expected to gain ground before year end. "Last year we were behind, too, and ended the year ahead," said Mr. Roszell.
There have been some speed bumps along the way. Soon after the inception of its flagship large-cap equity product in 1972, portfolio managers watched the S&P drop to a low of -26.53% in 1974. In 1988, the firm had its worst finish compared with the S&P, ending the year up 8.13%, while the S&P was up 16.53%. AmEx blames overvaluation for its poor performance in the late '80s.
Looking ahead, the firm plans to expand global operations with offices in Hong Kong, Singapore and Toyko, and now manages $9 billion in international equity for U.S. clients, in addition to $1 billion in global bonds. AmEx's assets under management totaled s $37.7 billion as of Oct. 31.
