Hiring an inexperienced adviser to manage your funds would be like hiring an amateur paramedic for heart surgery; it will only lead to disaster.
American funds tend to be overburdened with too many assets; only nine out of their 14 asset classes qualify as actual asset classes compared to others. This contributes to their mediocre performance when adequately evaluated.
Capital Group
The Capital Group ranks among the world’s premier investment management organizations. Established in 1931, this privately held company distributes funds worldwide through retirement fund consultants and financial advisers. Capital Group boasts offices around the globe with more than 7,000 associates working at its various global locations, offering equity- and fixed-income mutual funds and practice management services.
The firm invests on behalf of clients through mutual funds that offer a diverse array of strategies managed by experienced analysts and managers. Its track record of solid returns has made it one of the premier mutual fund families, outstripping competitors during bear markets while starting from an advantageous position during subsequent recoveries.
American Funds’ target date series offers investors an anticipated retirement date in mind and the ability to select their fund that corresponds with that year and allows it to alter its portfolio mix over time gradually. Individual investors can choose a fund that fits their retirement date and let its experts handle everything for them; portfolios are heavily diversified, while managers avoid risky sectors like financials.
American Balanced is one of the company’s most sought-after funds, featuring managers prioritizing acquiring high-quality assets with solid growth prospects, such as foreign stocks and bonds with ratings of BBB or higher. The bond component primarily comprises investment-grade debt (debt with ratings above BBB).
New Economy Fund, an investment fund focused on large-cap foreign stocks, has outshone most of its Bloomberg peer group by returning approximately 11 percent annually over five years – an outstanding return compared to 97% of them! Tim Armour was once John Bogle’s colleague before his passing (founder of Vanguard Group).
As part of its dedication to quality, the firm has developed an innovative system of dividing its portfolios into “sleeves” and assigning different managers to manage each sleeve, enabling it to tap its talent pool while offering investors more choices. Furthermore, managers regularly visit companies they plan to include in their portfolios- including factories, warehouses, and research facilities.
The American Funds Investment Company of America
American Funds are like Paris Hilton (or, more recently, Kim Kardashian) of investing: they spend lots of money generating hype while providing no tangible advantages to investors. The investment performance of mutual funds has been subpar, their fees and commissions are high, and their portfolios bloated with too many similar stocks, yet they remain one of the most famous families of funds – why? There may be various reasons. First, broker-dealers own exclusive access to American Funds, giving their Reps a generous sales commission for selling them. Next, commission-based advisors must amass specific points each year or face dismissal; selling American Funds garners extra points! And there are always free meals and cool swag at conferences.
American Funds offer some excellent retirement planning products through their Target Date series of funds, with investors selecting their desired year closest to retirement as they move closer towards it and the managers automatically changing the mix of stocks and bonds towards more conservative ones as they near that date. It should be noted, however, that Morningstar only awarded these Target Date Retirement funds with silver status, so these may not be considered among the best choices for retirement planning.
American Funds Growth and Income series funds offer another excellent investment option for income investors, consisting of income funds that hold both growth and value stocks, emphasizing large U.S. companies with respectable dividends. Although ideal for income investing, these come with an initial charge of 5.75%, which requires $250 to start.
American Funds International funds also feature heavily; among them is the American Funds World Growth and Income fund (AWGIX), which seeks to outstrip the market by investing in stocks from fast-growing countries with potential long-term gains – though it does come at the cost of an expense ratio of 0.91% and front load fees of 5.75%.
Suppose an American Fund salesperson sells you funds. In that case, I advise opening a discount brokerage account and liquidating all of them quickly to avoid paying their 5.75% front load and creating portfolios containing too many similar stocks.
American Funds Target Date Retirement Series
American Funds is a large mutual fund company that oversees over $1 trillion of assets, offering diverse investing options and being one of the leaders in target-date retirement funds designed to provide diversification and growth over time. Furthermore, American Funds also offers consulting and investment solutions to institutions and high net-worth individuals and families worldwide – boasting offices worldwide and employing 7,000 associates globally.
Target Date Retirement Series from Vanguard provides investors with a selection of target date portfolios tailored to individual investors’ individual needs and goals. Once selected, investors select their expected retirement year as their target date; from that point forward, the fund managers automatically shift stock allocation over time by these changing demands. It provides an affordable way of accessing professional investment management, simplifying retirement savings.
American Funds New Perspective Fund is among our highest-rated target-date 2030 funds in our evaluation. With nearly 170 stocks invested domestically and abroad that boast above-average earnings growth, this fund boasts a strong track record in down markets while remaining highly diversified – cash holdings have allowed this fund to stay away from ailing sectors during challenging periods, helping protect value during market swings.
This target-date retirement series utilizes an innovative glide path structure, which allows it to avoid overexposure to equity markets. Longer-dated portfolios tend to emphasize growth strategies from their firm. At the same time, those nearer retirement have more balanced holdings emphasizing value investing and feature a minor value tilt. While its results have varied in recent years, this strategy may help reduce short-term volatility while increasing long-term returns.
This fund offers various share classes, with Class A shares having a sales charge of 5.7 percent per annum and offering tax-deferred capital gain distributions (if this occurs, a Form 1099-DIV from the company will be sent). You can view its prospectus by visiting its provider site.
American Funds Target Date Income Series
American Funds Target Date Income Series funds offer investors one of the best retirement savings solutions. They provide an efficient and straightforward method for managing retirement investment portfolios; investing in stocks, bonds, and cash alternatives while diversifying by investing in other underlying funds helps reduce risks of investment loss. They’re available through 401(k) plans and individual brokerage accounts.
The unique selling proposition of American Funds target-date funds lies in their glide path: as time progresses, assets will gradually shift from holding more stocks to holding less of them, leading to greater diversification across asset classes – as seen with their 2025 American Funds target-date retirement fund, which has 9% cash, 75% stocks, 13% bonds, and 1% other diversified assets compared with typical target date funds that typically invest only 84% stocks and only 6% cash.
Additionally, the series leaders are continuously reviewing and revising their asset allocations. Recent changes saw several region-specific strategies scaled back in favor of more globally focused approaches – an encouraging sign for future developments.
American Funds’ Target-Date Retirement Series is accessible to all investors. While other mutual funds typically require minimum investments of at least $2,500, the Target Date Income Series of American Funds can be bought with just $1. This investment opportunity may especially appeal to millennials starting their careers and seeking ways to secure their financial futures.