American Funds, part of the Capital Group, holds assets worth $1.69 billion as of Apr 30, 2018. It emphasized in improving its active strategies to become the biggest active fund manager, superseding Fidelity. Moreover, the company also focuses on providing low-cost funds, which will offer above-average returns.
Low expenses, effective fund management and the resilience to survive market volatility have resulted in strong fund returns for the fund family. Following the strong performance, investing in American Funds seems prudent.
American Funds in Q1
The second-biggest fund family of the United States increased dividend payment for its fundamental investors over the last year. Moreover, around 41.6% American Funds mutual funds has no front or back-end sales load.
As of Apr 30, 2018, total returns of the fund family were around 0.6%, which is more than the category average of 0%. Also, its trailing returns for the year-to-date (YTD) period is 0.62%, while its annual turnover is 47%.The minimum initial investment of the American Funds mutual funds is $0 to $250.
Further, one of the best-performing mutual funds from the American Funds family is American Funds 2025 Trgt Date Retire R5 (REDTX). REDTX, which invests a bulk of its assets in a plethora of fund categories such as growth funds, growth-and-income funds, equity-income funds and balanced fund, returned 9.9% in the past year.
According to Morningstar, American Funds 2020 Target Date Retirement R5 (RECTX) and American Funds 2025 Target Date Retirement R5 have come up with the best performance in the past five years among the key American Funds mutual funds.
What Boosted American Fund's Performance?
American Fund invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments are made in technology. Among the cyclical sectors, it invests in financials. The fund family also gained from investing in defensive sectors like healthcare.
