American Funds: An Overview of Mutual Fund Investments
Investing in mutual funds has been a favorite choice for many people who want to increase their wealth over the years. Due to the availability of numerous mutual funds, it can be quite a challenge to identify which mutual fund is the most suitable for your investment goals. In this article, we will explore American Funds, one of the most popular and respected mutual fund families in the United States.
An Introduction to American Funds
American Funds was established in 1931 and is a subsidiary of Capital Group, one of the biggest investment management companies in the world, with assets under management of more than $1.7 trillion. The company has grown to become a major player in the mutual fund industry.
What makes American Funds special is that it has a focus on long-term investment. The firm seeks to develop portfolios that can provide reasonable returns over the long run, something that has caught the attention of many investors. Therefore, American Funds has outgrown many of its competitors across the different asset categories.
Many Different Types of Investments Available
American Funds has a wide selection of mutual funds to choose from to meet the goals and risks of different investors. Whether you are a conservative investor who wants stability or a adventurous one who wants to go for growth, there is an American Funds mutual fund that is suitable for you.
This is because American Funds has target date retirement funds as one of its unique products. These funds shift their investments automatically as the retirement date approaches, thus taking the work off the investor’s shoulders and making retirement planning easier.
Additionally, there are several sector specific funds provided by American Funds which enable investors to select specific industries which the manager believes will perform well. This is particularly interesting to those who have a particular view on the potential of certain industries.
A Solid History
The history of American Funds tells the story. It has been a vehicle of generating superior returns to its investors and has been outperforming its competitors in various asset categories over the past 1, 3, 5 and 10 years as per Morningstar, one of the most trusted investment research firms.
For instance, the American Funds Growth Fund of America, one of the biggest products, has outperformed the S&P 500 index in the long run, revealing its capacity to provide higher returns with reasonable risk. Take a look at their website and you’ll see a long list of accolades and achievements.
However, it is very important to note that past performance does not equal future performance. nulltheless, American Funds’ long-standing success shows that its investment policies and analytical capabilities are worth taking into consideration when choosing mutual funds.
Cheap and Investor Centered Model
American Funds is a company that is known for having low costs and a consumer friendly model. Some companies charge high fees, but American Funds has the goal of keeping its expense ratios low.
Expense ratios are fees that are annually charged by mutual funds and they can greatly affect your investment returns in the long run. Thus, by keeping these ratios low, American Funds helps investors to keep more of their money.
Also, American Funds provides educational material to help investors make informed decisions. This includes articles, videos and webinars that cover a variety of investment topics.
American Funds has also focused on transparency in its operations and provides detailed information on the holdings and strategies of each fund. This transparency helps investors to know more about their investments and make decisions that are most appropriate for them based on their risk appetite.
