Since the early 1930s, the Capital Group’s American Funds family has represented a cornerstone in the investment world, offering a wide range of mutual funds suited for different financial goals. Over the years, American Funds has secured a spot in the minds of many based on its 54 fund offerings and continues to be known for generating steady returns through active management by professional analysts and managers.
Here the funds run the gamut of investment strategy from growth and income-focused options to value-driven and balanced portfolios. These mutual funds have most time been the investment of choice by several investors because of their great performance, accomplishment in the long run—some could even outperform the benchmark index like the S&P 500.
Be it long-term capital growth, regular income, or balancing one’s approach, American Funds has something to offer in consideration of different appetites toward risk and financial goals. Below, we present some of the well-founded and leading funds of American Funds, depicting their historical performance, management strategies, and value base, which has kept faith intact on the part of old and new investors in the trading market for growing and securing one’s financial status over time.
American Mutual Funds
1) American Funds Investment Company of America
The Investment Company of America fund (AIVSX) is a growth and income-oriented equity mutual fund that has been actively managed. Since its creation in 1934, the typical annual return has been 12.04%, surpassing the S&P 500’s 10.64% average yearly return for the same time period as of March of 2021.
The fund has a five-year annualised return of 12.73%, a 0.58% cost ratio, and a 1.26% dividend yield.
2) American Mutual Fund
The American Mutual Fund (AMRMX) is a large-cap values fund and seeks to save money by choosing the companies with solid fundamentals and long-term dividends (American Mutual Funds). Since its inception in 1950, the fund has averaged an annual return of 11.53%. The fund’s five-year annualised return is 10.9%, with a 0.59% cost ratio and a 1.73% dividend yield.
3) New Perspective Fund
In March 1973, American Funds introduced the New Perspective Fund (ANWPX), with the investing aim of long-term capital appreciation. The fund management mostly invests in blue-chip international corporations through common stock, preferred stock, bonds, or convertible instruments. An average yearly returns since start is 12.61% as of May 2021. The fund’s five-year annualised return is 17.16%, with a 0.76% cost ratio and a 0.11% dividend yield.
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4) AMCAP Fund
The AMCAP Fund (AMCPX), established in 1967, pursues long-term capital growth by choosing firms with consistently higher profits (American Mutual Funds).
The fund’s ten-year average annual return is 12.43%, its five-year annualised return is 15.34%, and its cost ratio is 0.68%, which is substantially below the category average of 1.17%. The dividend yield is at 0.17%.
5) The Growth Fund of America
The Growth Fund of America (AGTHX), founded in December 1973, goes after long-term capital growth through investing in cyclical firms, undervalued companies, and possible turnaround stories. The average annual return of the fund is 13.44%, the five-year annualised return is 19.25%, and the cost ratio is 0.64%.
6) The Income Fund of America
The Income Fund of America (AMECX), which debuted in December 1973, pursues capital growth by investing (American Mutual Funds) in a mix of equities, convertible instruments, and bonds. It has a 10-year annualised return of 7.71%, a 5-year annualized return of 7.96%, and an expense ratio of 0.57%. The fund has an appealing dividend yield of 2.95%.
7) American Balanced Fund
The American Balanced Fund (ABALX), which debuted in July 1975, pursues long-term capital and income expansion by investing at least 60% of its financial holdings in shares of common stock and 40% in the bond market as a whole. The fund’s five-year annualised return is 9.81%, with a 0.58% expense ratio and a 1.6% dividend yield.
8) The Bond Fund of America
The Bond Fund of America (ABNDX) (American Mutual Funds), established in 1973, manages a diverse stable income assets by responding to evolving bond market circumstances in pursuit of high income and capital preservation. The fund’s 10-year annualised return is 3.08%, and its five-year annualised return is 3.00%. It has a 0.57% expenditure ratio and a 1.5% yield.
9) The Tax-Exempt Bond Fund of America
The Tax-Exempt Bond Fund of America (AFTEX), established in October 1979, intends to maximise tax-exempt income by investing largely in municipalities and government-issued bonds. The fund has a 4.07% annualised return over ten years and a 2.62% annualised return over five years. The fund’s 12-month yield is 2.14%, with a 0.52% cost ratio.
10) Fundamental Investors Fund
Since its creation in August 1978, the Fundamental Investors Fund (ANCFX) has sought for value-add opportunities and businesses with superior sales and profits prospects. The 10-year annualised return of 12.30% has been surpassed by the fund’s five-year annualised return of 14.33%. The dividend yield is 1.33%, while the expense ratio is 0.61%.
Conclusion
Indeed, the American Funds family of mutual funds has grown in its long history, since the early 1930s, to offer investors a wide variety of funds, each designed to suit one investment objective or another. From growth and income-oriented funds such as the Investment Company of America to value-driven funds like the American Mutual Fund, these offerings indeed have demonstrated robustness and impressive returns for decades.
These funds have shown significant long-term capital appreciation, such as the New Perspective Fund and The Growth Fund of America, while other funds provide lower-risk, stable income, such as The Income Fund of America and The Bond Fund of America. While the types of funds range from pure equity through to balanced and bond funds, it is guaranteed that the investors will always find those presenting the right options for their risk tolerance and financial objectives.
With strong tenure in management and excellent historic returns, American Funds continue to represent one of the tried-and-true investment houses that both beginning and experienced investors can use to diversify their portfolio in their quest for long-term financial success.