NEW YORK (MONEY Magazine) - Can a gargantuan fund ever excel? Three mega-funds from Capital Research & Management's American Funds group seem to have found a way.

Over the past decade, Growth Fund of America, Washington Mutual Investors and Investment Company of America earned average annual returns of 12 to 14 percent. Magellan shareholders earned 9 percent. So what are the American Funds doing right?

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A comparison of Growth Fund of America and Magellan shows some striking contrasts.

Magellan, like all Fidelity funds, has a single manager who relies on research from Fidelity's vast corps of analysts. Growth Fund of America, like all of American's funds, has a team of six "portfolio counselors," each of whom is responsible for his own piece of the fund.

Charles Ellis, founder of investment industry consultant Greenwich Associates and author of a new book on Capital Research, says the multimanager system is a key to American Funds' success.

In effect, the giant funds are run "as a coordinated bunch of mid-size or smaller funds," he says. "It is such a powerful concept and it works so well."

With less money to deploy, managers don't have to confine themselves to only the very biggest stocks and can stick to only their best investment ideas.

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And that shows up in the portfolio statistics. At Magellan, the average market value of the stocks in the portfolio is $60 billion; at Growth Fund of America, it's $27 billion. Magellan's top 10 holdings include seven stocks in the S&P 500's top 10; only two of Growth Fund of America's 10 biggest holdings come from the S&P's top 10.

Last year, Growth Fund of America was the fastest-selling fund in the country, pulling in $14 billion, according to Financial Research Corp., to become the largest actively managed equity fund. The question now is whether the fund can maintain its success as it grows even bigger.