Overview: American Funds Review
Since 1931, American Funds has been a force in the mutual fund industry, amassing $1.3 trillion in assets under management, according to one American funds review. American Funds is owned by the Capital Group and claims to have a “proven track record of success in building wealth for investors.”
Image Source: American Funds
In addition to individual American Funds retirement accounts, it offers college savings accounts, individual investment portfolio accounts, and employer-sponsored retirement plans.
We’ve taken a look at American Funds reviews from professionals and individual investors alike to see what you need to know about American Funds retirement solutions.
American Funds Reviews: Strategy
One American Funds review by Kiplinger talks about its approach to investing, which includes a long-term buy-and-hold philosophy. That kind of fundamental approach to investing has long been its strategy, but that doesn’t mean it is passive. Rather, it attracts investors who prefer to be passive themselves, according to one American Funds review by LA Central Coast.
According to an American Funds review by Investment News, it is ready to “double-down on active investing.” Despite its vast holdings, it now ranks 3rd in fund assets, behind Vanguard and Fidelity Investments, according to the American Funds review.
An American Funds review by Investor Place calls its portfolios “built to last,” due to its long-term outlook and dozens of years of experience.
American Funds Reviews: Mutual Funds
For investors interested in saving for retirement, the most recent American Funds review by Kiplinger recommends buying the American Balanced Fund, the Washington Mutual Fund, and the New Perspective Fund. The American Funds review goes on to recommend selling the Growth Fund of America, which is the largest actively managed fund in the United States.
The American Funds review by Investorplace has a different opinion for 2016. It recommends buying the Growth Fund of America, the Europacific Growth fund, and the Fundamental Investors fund.
Investors using American Funds to retire or simply to build their net worth have a wide range of funds to choose from to match their investment objectives and personal levels of risk-tolerance.
Its investments include mutual funds in the following categories:
- Growth and income
- Equity income
- Taxable bond
- Tax-exempt bond
- Money market
The American Funds money market fund carries the lowest level of volatility, but the return over the last 5 years is 0.08%. There are 34 mutual funds in all, not counting the portfolio series.
An American Funds review by Investment News says that the mutual fund company has maintained a brand favorability rating in the top five since the financial crisis of 2008. The review goes on to say that it appeals to financial advisors due to consistent performance, among other factors.
One American Funds review by Investor Place points out that the managers of each fund keep their priorities aligned with investors by investing in the funds themselves. American Funds has high manager tenure and a team approach, providing a “winning formula for long-term investors.”
American Funds Reviews: Retirement
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American Funds retirement solutions offers various plans for investors. It has both traditional and Roth IRAs for individual investors, and for employer-sponsored retirement plans, it provides the following:
- 401(k) plans
- 403(b) plans
- SIMPLE IRAs
- SEP plans
American Funds Retirement Solutions for employer-sponsored plans offers a few different investment options. It has the Target Date Retirement Series and the Portfolio Series. The Portfolio Series has 8 choices that are essentially “funds of funds,” according to an American Funds review by Wealthmanagement.com.
American Funds also offers recordkeeping solutions for employer-sponsored plans through its Plan Premier-TPA and Recordkeeping Direct. Another benefit of employer-sponsored retirement plans is that employees will have access to their accounts once they are set up, according to an American Funds review by Business News Daily.
Customers looking to fund an IRA can choose from any of the mutual funds provided by American Funds to invest in their retirement plans, but the American Funds Retirement Income Portfolio Series is specifically designed with current retirees in mind. There are three portfolios to choose from: Conservative, Moderate, and Enhanced.
According to an American Funds review by Top Ten Reviews, investors can use the tools, such as an IRA comparison table and a savings calculator, to help plan for retirement. Anyone using American Funds to retire can benefit from utilizing the planning tools that the mutual fund company makes available.
American Funds Reviews: Investing
More than one American Funds review discusses the fact that the mutual funds are sold only through advisors. The mutual fund company won’t let do-it-yourself investors buy directly, according to the American Funds review by Kiplinger.
The American Funds review by Investment News says that the fund company believes in the value of professional guidance, and it recognizes the fact that professional advice improves investors’ outcomes.
The drawback of mutual funds sold through advisors, according to several American Funds reviews, is the cost. The mutual fund company compensates advisors with commissions by charging a front-end load, a back-end load or a combination with higher expenses and flat fees. The American Funds review by Investopedia says the maximum front-end load is 5.75%.
However, an American Funds review by Valuewalk calls its fees “investor friendly” for actively managed funds.
Top Rated Firms says in its American Funds review that there’s an initial minimum investment of $250, and additional investments have a minimum of $50. The only exceptions are the American Funds money market fund and the state tax-exempt funds which require a $1000 minimum to start.
American Funds Reviews: Website
Though most investors will receive service directly from their financial advisors, customers can access their accounts directly via the website. Once someone has purchased American Funds through an advisor, that individual can buy, sell or exchange shares as well as track their portfolio online.
According to the American Funds review by Top Ten Reviews, customers have access to several tools in addition to the portfolio tracker:
- Savings calculators
- IRA comparison table
- Tax information
- Articles on investing
- Information on the funds
American Funds also offers customer service via phone, mail or directly on the website. At this time, there is not an American Funds app.
Whether investigating American Funds to retire or to build your investment portfolio, spending time on the website will be time well spent. For beginning investors, there’s articles on mutual fund basics and creating a financial plan as well as more advanced topics for experienced investors.
Professional American Funds Reviews by NerdWallet, Investment News, and Kiplinger
American Funds reviews are a mixed bag and seem to fluctuate with the market. However, there are some commonalities mentioned across the board.
One advisor on NerdWallet calls American Funds “a good, solid mutual fund company.” Another advisor says it is an “excellent fund family” and that their “management fees are reasonable.” However, a third advisor at NerdWallet complains that many of the investments inside the funds overlap, causing portfolios to be “overconcentrated.”
An American Funds review on Investment News calls the mutual fund company a “dominant player in the retirement space.” However, the review goes on to quote a financial advisor who claims that very few of that individual’s fee-only peers would “recommend American Funds for part or all of their client portfolios.”
Kiplinger’s American Funds review says that “many of American Funds’ portfolios are solid choices” and that the “family has several good funds” despite the fact that Kiplinger’s doesn’t typically recommend loaded funds.
While the American Funds reviews don’t necessarily rave about the mutual fund company, they don’t balk at them either. Top Rated Funds says in its American Funds review that the firm has a “good reputation throughout the financial industry.”
American Funds Reviews by Consumers
Customers who have actually used American Funds to retire or invest for the future appeared to vote with their dollars after the financial collapse of 2008, when the mutual funds company lost $251 billion to redemptions. However, the investors have started to come back, and the mutual fund company now has approximately $1.3 trillion in assets under management.
There are few customer reviews to be found, but the American Funds reviews at Consumer Affairs indicate problems that revolve around paperwork issues and misunderstandings with the brokers who sold the funds.
The scarcity of American Funds reviews online by consumers seems to indicate a general contentment with the mutual fund company.
Is American Funds Right for Me?
As with any investment decision, each person must take into account his/her personal situation and factors, including net worth, timeline, and risk tolerance. If you’re thinking about investing in American Funds to retire or simply to build your investment portfolio, it’s a good idea to evaluate your choices based on solid research.
Taking all the American Funds reviews into consideration, it seems this mutual fund company will appeal to customers who:
- Prefer an actively managed mutual fund
- Value professional advice
- Want a mutual fund company with a long, proven track record
- Prefer a fundamental approach to investing
- Have a long-term investment outlook
- Value a buy-and-hold strategy for personal investing
- Do not mind paying a load
- Enjoy a user-friendly website
- Do not require an American Funds app
American Funds will likely not appeal to investors who:
- Prefer a do-it-yourself approach to investing
- Enjoy online trading
- Have a short-term investment outlook
- Value short-term gains over a buy-and-hold strategy
- Do not want a loaded mutual fund
If you’re considering using American Funds for retirement, talk to a professional. The American Funds website has an advisor locator to help you find an experienced broker near you.
Depending on your level of investment experience, your investment goals and timeline, and your risk-tolerance, American Funds retirement solutions might be the right choice for you.
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