Founded in 1931, Capital Group offers a wide range of financial services all over the world through its offices in different regions including North America and Europe, and 7,000 associates. With years of investment experience, American Funds, a segment of Capital Group, offers a wide range of mutual funds with an objective of providing long-term returns.
American Funds currently manages nearly $1 trillion, allocated to a large number of mutual funds including equity as well as fixed-income funds. Moreover, one of the biggest investment management organizations in the world, Capital Group, has more than $2.6 trillion assets under management, as of Jun 30, 2021.
The fund house invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments were made in the technology sector. Among the cyclical sectors, the fund family invested the maximum in the financial services sector, while among the defensive sectors it invested heavily in healthcare.
Technology Select Sector SPDR (XLK) has climbed 38.7% over the past one year and turned up as one of the best-performing sectors among the 11 S&P 500 sectors.
4 Best Funds to Buy Now
We have highlighted four American Funds mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) that are the best bets for the year ahead. Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
American Funds Tax-Aware Conservative Growth and Income Portfolio Class A TAIAX seeks current income, a portion of which is exempt from regular federal income tax. TAIAX invests in a mix of American Funds in different combinations and weightings. These underlying American Funds primarily consist of growth-and-income, equity-income, balanced and fixed income funds. TAIAX is expected to have significant exposure to dividend-paying stocks by investing in these underlying funds. The fund also invests a sizable portion of its assets in foreign companies.
This Zacks Muni-Bonds product has a history of positive total returns for more than 10 years. PGWFX carries a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.56%. The fund has one and three-year returns of 28.8% and 11.8%, respectively.
American Funds American High-Income Trust Class A AHITX seeks to provide a high level of current income, with capital appreciation being its secondary objective. The fund invests primarily in higher yielding and generally lower quality debt securities like corporate loan obligations. It may also invest a portion of its assets in securities of companies located outside the United States.
This High Yield-Bonds product has a history of positive total returns for over 10 years. Specifically, the fund’s returns over the one and three-year benchmarks are 14% and 7%, respectively. The fund carries a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.73%.
American Funds American Mutual Fund Class R-4 RMFEX seeks growth of capital, current income as well as conservation of principal. RMFEX invests primarily in common stocks of companies that are likely to contribute toward the growth of the American economy and provide sustainable dividends. It invests mainly in securities of companies located in the United States and Canada.
This Zacks Large Cap Value product has a history of positive total returns for more than 10 years. RMFEX sports a Zacks Mutual Fund Rank #1 and has an annual expense ratio of 0.62%. The fund has one and three-year returns of 23.2% and 11.2%, respectively.
American Funds New Perspective Fund Class 529-A CNPAX seeks long-term growth of capital, future income being the secondary objective. CNPAX seeks to take advantage of the investment opportunities that arise due to changes in international trade patterns and economic and political relationships, by investing in common stocks of companies from around the world.
This Zacks Global-Equity product has a history of positive total returns for more than 10 years. CNPAX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.79%. The fund has one and three-year returns of 30.3% and 20.1%, respectively.
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