5 Strong Performing American Funds Mutual Funds of 2016
American Funds is focused on providing low cost funds to its investors. The company has freed its F1 share class funds from any commission charge to address its investors’ needs. Moreover, American Funds got approval from the Securities and Exchange Commission (SEC) to issue share class funds, which do not carry any distribution fee.
Also, the fund family generated outstanding returns from some of its key funds in 2016 that got reflected in Morningstar’s 2016 “Fantastic 45” List. According to the list, out of 45 funds, 11 belong to the American Funds’ family. Lower expenses, effective fund management and the resilience to survive market volatility have resulted in strong fund returns.
The second biggest fund family of the U.S. sought more attention from investors last year. In order to garner investor attention, American Funds launched three new fixed income funds last year, namely American Funds Emerging Markets Bond Fund, American Funds Corporate Bond Fund and American Funds Strategic Bond Fund. Following the strong performance by American Funds, investing in funds from this family might be prudent.
What Boosted American Fund’s Performance?
American Funds invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments are made in the technology sector. Among the cyclical sectors, the fund family invests in financial services. The company has also gained from investing in defensive sectors.
Technology Select Sector SPDR (XLK) jumped 25% in the last one-year period. Additionally, mutual funds related to this sector registered stable returns. According to Morningstar, the technology mutual fund registered a one-year return of 27.6%.
Additionally, FinancialsSelect Sector SPDR (XLF) climbed 33.4% in the last one year and was one of the biggest gainers among the S&P 500 sectors. Moreover, the financial mutual fund returned 32.4% in the past one-year period, according to Morningstar.
More About American Funds
American Funds is one of the largest and oldest mutual fund companies in the world. It has more than $1.3 trillion assets under management invested in mutual funds across a wide range of categories including both equity and fixed-income funds. Generally, American Funds focuses on providing long-term returns to investors. The fund family deals with more than 40 mutual funds.
The parent company of American Funds, Capital Group, currently has around $1.4 trillion assets. Founded in 1931, American Funds 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.
Buy These 5 American Mutual Funds
We have selected five mutual funds that carry a Zacks Mutual Fund Rank #1 (Strong Buy). These funds have encouraging one-year annualized returns and minimum initial investment is within $5000. Also, these funds have low expense ratios.
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.
American Funds Investment Co of America R6 RICGX seeks capital and income growth for the long run. RICGX invests the bulk of its assets in equity securities of dividend paying companies. The fund may also invest nearly 15% of its assets in foreign companies.
RICGX has an annual expense ratio of 0.30%, which is below the category average of 1.05%. The fund has one-year annualized return of 14.9%. As of the last filing, Abbvie Inc, Amgen Inc and Verizon Communications Inc were the top holdings for RICGX.
American Funds American Mutual F2 AMRFX invests the lion’s share of its assets in companies which have sustainable dividends. AMRFX seeks appreciation of income and capital along with principal preservation. The fund normally invests in securities of companies located in the U.S. and Canada.
AMRFX has an annual expense ratio of 0.42%, lower than the category average of 1.10%. The fund has one-year annualized return of 14.3%. As of the last filing, Verizon Communications Inc, Texas Instruments Inc and Amgen Inc were the top holdings for AMRFX.
American Funds AMCAP R6 RAFGX seeks capital appreciation for the long run. RAFGX invests heavily in securities of domestic companies which have solid growth potential.
RAFGX has an annual expense ratio of 0.37%, lower than the category average of 1.19%. The fund has one-year annualized return of 9.4%. As of the last filing, Amgen Inc, Oracle Corp and Netflix.com Inc were the top holdings for RAFGX.
American Century Utilities Investor BULIX invests a major portion of its assets in equity securities of companies engaged in the utilities sector. BULIX seeks appreciation of income and capital for the long run. The fund managers generally use qualitative and quantitative management techniques.
BULIX has an annual expense ratio of 0.68%, which is below the category average of 1.24%. The fund has one-year annualized return of 23.6%. As of the last filing, Verizon Communications Inc, AT&T Inc and Exelon Corp were the top holdings for BULIX.
American Century All Cap Growth Investor TWGTX seeks capital appreciation over the long run. TWGTX primarily invests in stocks of companies that are believed to have above-average earnings or revenues growth. The fund uses analytical research tools and techniques to choose growth-oriented companies with large-size market capitalization.
TWGTX has an annual expense ratio of 1.00%, lower than the category average of 1.19%. The fund has one-year annualized return of 3.1%. As of the last filing, Alphabet Inc, Facebook Inc and Apple Inc were the top holdings for TWGTX.
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