Would you invest in the American Funds?

[packrat44]

What are your experiences/opinions investing in various American Funds? (Other than the negative of being a load fund. The load can be avoided by declaring you will have invested $1m+ over a period of 13 months and following through.) I am looking at long term - 10 years+.

[FinanceDude]

Originally Posted by packrat44

What are your experiences/opinions investing in various American Funds? (Other than the negative of being a load fund. The load can be avoided by declaring you will have invested $1m+ over a period of 13 months and following through.) I am looking at long term - 10 years+.

All my qualified money is in there, along with millions of my client's money. I have been invested with them for almost 15 years........

If you have $1 million, you buy the shares at NAV, and after a holding period of 1 year, they are 100% liquid.

Compared to nearly all other fund families, their expense ratios are quite low. Bogle has said they are the only fund family in the load arena that he respects.........

[yakers]

Of the load funds I like AF the best. Not enough to move $ there but enough that I would not advise someone to move funds out that are already with them if the fund selection is appropriate. I expect that they could continue to outperform for a while (my wife was similarly successful with the Fidelity Contrafund) but eventually most good funds start to match an index. Less risk with an index. Now if there is a specific fund that you like for asset allocation reasons then AF could be good.

I do have my son's ed Roth in AGTHX (AF Growth fund) and it has done well. will get cashed out in the next couple years to pay college costs. Then I will be all VG, except for my employeer retirement fund (TSP) and some stocks.

[Sarah in SC]

I've got one American Funds, Capital Income Builder.
Like FD, we recommend them for clients looking to buy mutual funds.

Sarah

[FinanceDude]

The main thing to remember is that American is a large cap value shop. You can't fill up all the morningstar style boxes with them, no mid cap and the only small cap is an international blend fund........

[Darryl]

I own a half dozen different AF funds. I am still buying though on a much smaller scale as since I found this board I now use VG for the majority of my buying.

[FinanceDude]

Originally Posted by Sarah in SC

I've got one American Funds, Capital Income Builder.
Like FD, we recommend them for clients looking to buy mutual funds.
Sarah

I like American Balanced Fund........."boring done well".............

[packrat44]

Presently I have the following AF funds at stated percentage in my portfolio:

CWIGX 35%
CAIBX 9%
AGTHX 3%
SMCWX 3%
AMECX 2%
NEWFX 1%
ANCFX 0.5%

CWGIX is my international equity.

Any dogs? Any recommendations?

[chinaco]

Not sure if you are constrained on the choices (e.g., 401k options) or if it is a taxable account where all funds are available.

IMO - I always go for the lower cost (which often means index) funds that help me achieve my allocations. If the fund is actively managed, I still prefer a lower cost. Obviously, good long-term performance (with the same manager/team) is also a qualifier.

[FinanceDude]

Originally Posted by packrat44

Presently I have the following AF funds at stated percentage in my portfolio:

CWIGX 35%
CAIBX 9%
AGTHX 3%
SMCWX 3%
AMECX 2%
NEWFX 1%
ANCFX 0.5%

CWGIX is my international equity.

Any dogs? Any recommendations?

a)It doesn't add up to 100%.........

b)We don't know your risk tolerance or goals for this portfolio.

c)More info needed.......

[Sam]

I currently own AF NEW WORLD R5 (RNWFX). No complain so far.

[TedMunson]

I used to have some money in AF funds, but that was 10 years ago. I have since switched my investing strategy away from load funds. I am now very sensitive to costs, so I stick with index funds and low-cost managed funds. With that said, looking back at the performance of those AF funds, they were quite competitive even with the load.

Now, I would probably be hard pressed to even consider a load fund. Maybe I am naive/ignorant, but it just seems like there are so many investment vehicles that don't charge a load to choose from.

Just my 2 cents.

Munson

[packrat44]

Originally Posted by FinanceDude

a)It doesn't add up to 100%.........

b)We don't know your risk tolerance or goals for this portfolio.

c)More info needed.......

FinanceDude,

Thanks for your response. I sincerely appreciate your help. While you take some ribbing on this site because you are a FA, you bring a lot of good tools to the table. I like GOOD tools!

a. Does not add up to 100%. The percentages listed are for their composition of the entire portfolio. The rest is: 26% individual stocks; 7% MM fund; 5% bonds; remainder in a Fidelity growth fund.

b. Risk tolerance. On the day of the crash in 1987, at the frantic suggestion of my stock broker to sell all my Intel, I told him to double my position. During the dot.com crash I continued buying using DCA. Never sold during these times. Now that I have crossed over from the accumulation phase to the distribution phase I need to become more conservative.

c. More information needed. I have a more recent post titled "Help, the wolves are upon me" where I list my background. At that post I am trying to establish an asset allocation before designing a plan for the implementation.

[FinanceDude]

Originally Posted by TedMunson

I used to have some money in AF funds, but that was 10 years ago. I have since switched my investing strategy away from load funds. I am now very sensitive to costs, so I stick with index funds and low-cost managed funds. With that said, looking back at the performance of those AF funds, they were quite competitive even with the load.

Now, I would probably be hard pressed to even consider a load fund. Maybe I am naive/ignorant, but it just seems like there are so many investment vehicles that don't charge a load to choose from.

Just my 2 cents.

Munson

Vanguard has a trillion in assets, FIDO has a trillion in assets, and AF has a trillion in assets, so they're all doing ok.........

[FinanceDude]

I did some quick analysis, on the AF portfolio ONLY:

Average return, including load, was 11.67% for ten years

Your portfolio mix of the blend of funds is as follows:

28% US stocks
61% Non-US stock
6.8% Cash
3.8%US bonds
.4% Non-US Bonds


It is skewed heavily toward international growth and income. Depending on your total mix, you might want to dial that back a little, although international has had a huge run, I think they're due for a pullback across the board.

The blended ER for this portfolio is .69 on a yearly basis.........

[ats5g]

Another drawback is the 12b-1 fees. If you're not getting any services from the guy/company that is getting the 12b-1 fees, I'd dump 'em.

And with any actively managed fund, I wouldn't own most of them in a taxable account.

[NotSoonEnough]

Originally Posted by packrat44

What are your experiences/opinions investing in various American Funds?

I own some shares of AWSHX, it was part of an inheritance from my Dad's estate so I didn't pay a load. I have left it alone and have been as happy as I would be with any Large-Value fund. The 0.6% ER is a little steep compared to some others, but it has been a consistent performer over the years...I can't complain and haven't thought about selling.

[Disappointed]

Originally Posted by Sam

I currently own AF NEW WORLD R5 (RNWFX). No complain so far.

This class (R5)has the lowest expense ratio of all classes, without the load?