Founded in 1931, American Funds is one of the largest wealth management companies, managing billions of dollars of assets on behalf of institutional and individual investors. American Funds primarily uses a long-term perspective in its investment strategies and employs portfolio managers with an average of 27 years of investment-industry experience, including 22 years with the company. American Funds offers some of the lowest management fees in the fund industry, and many of its funds have beaten their benchmarks and peers and earned five-star overall ratings from Morningstar.

American Funds American Balanced Fund Class F-2 (AMBFX)

The American Funds American Balanced Fund has amassed $97.4 billion of assets under management (AUM) and seeks to conserve capital, current income and capital growth by investing in a mix of fixed-income securities and common stocks. The fund has some leeway to invest up to 15% of its assets in foreign stocks, but it may not invest more than 75% of its assets in stocks. The fund focuses on blue-chip stocks and investment-grade bonds with emphasis on U.S. securities. At the end of 2015, the fund allocated about 54% of its assets to U.S. stocks and 32% to bonds. The fund is well-diversified across various sectors, with financial services having the largest allocation at 18% of the fund's portfolio. Other dominant sectors include information technology (17% allocation), consumer defensive (14% allocation) and consumer cyclical (13% allocation).

Hilda Applbaum is the lead fund manager; she has been with the fund for over 16 years and has over 29 years of investment-industry experience. The fund has generated an average annual return of 6.54% and a standard deviation of 10.4% from 2005 to 2015. It has been around since 1975 and has received a silver analyst rating and five-star overall, three-year and five-year ratings from Morningstar in the moderate-allocation category. The class F-2 shares of the fund do not have load fees and come with a very low net expense ratio of 0.39%.

American Funds New Perspective Fund Class F-2 (ANWFX)

With over $61.5 billion of AUM, the American Funds New Perspective Fund seeks long-term capital growth by investing in common stocks of companies with global presence that are poised to take advantage of changes in international trade patterns. Additionally, the fund focuses on companies with strong growth prospects and durable business models. The American Funds New Perspective Fund invested about 45% of its assets into U.S. stocks, while foreign stocks have about 46% allocation with a large concentration on European companies. About 20% of the fund's portfolio is invested in information technology, while consumer cyclical stocks account for 18% of assets.

The fund has outperformed most of its peers over the last three-, five- and 10-year periods. From 2005 to 2015, it has shown an average annual return of 6.41% and a standard deviation of 15.94%. Morningstar has awarded the fund with a gold analyst rating and five-star overall, three-year and five-year ratings in the world stock category for its strong risk-adjusted returns. There is no load fee associated with investing in the fund's class F-2 shares, and there is a net expense ratio of 0.55%.

 

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