With an average of 27 years of investment experience, American Funds offers a wide range of mutual funds with an objective of providing long-term returns. The company currently manages nearly $1 trillion, allocated to a large number of mutual funds including equity as well as fixed-income funds. Moreover, its parent company, Capital Group, which has around $1.4 trillion assets, is considered one of the biggest investment management organizations in the world. It offers a wide range of financial services through its offices in different regions including North America and Europe, and 7,000 associates.
Below we share with you four top-rated mutual funds from American Funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.
American Funds Washington Mutual R6 (MUTF:RWMGX) seeks income through growth of principal. RWMGX generally invests in common stocks of well-known companies included in the New York Stock Exchange. It maintains a diversified portfolio by investing in securities of companies having an impressive record of earnings and dividend. American Funds Washington Mutual R6 has a year-to-date return of 4.5%.
RWMGX has an expense ratio of 0.30% compared with the category average of 1.10%.
American Funds Tax-Advantaged Income A (MUTF:TAIAX) invests in underlying American Funds, returns from which may be exempted from regular federal income tax. These funds include both equity and fixed income funds. TAIAX is expected to have significant exposure to dividend stocks by investing in these underlying funds. It may also invest in funds that allocate a sizable portion of their assets in foreign securities, which also include those issued in emerging markets. American Funds Tax-Advantaged Income A has a year-to-date return of 3.2%.
As of March 2016, TAIAX held four issues, with 25.22% of its total assets invested in American Funds Capital World Gr&Inc R6.
American Funds Mortgage A (MUTF:MFAAX) seeks current income. MFAAX invests the lion's share of its assets in mortgage-backed securities issued by the U.S. government or its agencies. The fund may also invest in securities of non-government entities. American Funds Mortgage A has a year-to-date return of 1.9%.
Fergus N. MacDonald is one of the fund managers of MFAAX since 2010.
American Funds US Government Securities A (MUTF:AMUSX) invests a large chunk of its assets in debt securities of the U.S. government and its entities. AMUSX may also invest in mortgage-related securities that are not affiliated with the U.S. government. The fund invests in securities irrespective of their maturity durations. American Funds US Government Securities A has a year-to-date return of 2.5%.
AMUSX has an expense ratio of 0.65% compared with the category average of 0.92%.