American Funds Investment: What You Need To Know

American Funds is a subsidiary of Capital Group, which has been helping investors pursue long-term investment success since 1931. American Funds offers a range of traditional mutual funds, as well as portfolio and target funds, which are all funds of funds. The Investment Company of America (AIVSX) is one of the funds offered by American Funds and is a large-blend stock fund that seeks to provide a combination of growth and income to investors. AIVSX primarily focuses on American holdings, with 86% of its assets in US equities.

Investment options

American Funds, a subsidiary of Capital Group, offers a range of investment options for investors with different financial goals and risk tolerances. Here is an overview of some of the investment options available through American Funds:

• Mutual Funds: American Funds offers a wide range of traditional mutual funds that invest in a diverse group of large, well-established companies across the United States. These funds can include equity funds, bond funds, and funds that focus on specific sectors or industries. Examples include The Investment Company of America® (AIVSX), which primarily invests in large, well-established companies representing a wide cross-section of the US economy, and the EuroPacific Growth Fund®, which focuses on international investments.
• Portfolio and Target Funds: These are "funds of funds," which means they invest in other mutual funds rather than individual securities. This type of fund can provide further diversification and is often designed with a specific investment goal or target date in mind, such as retirement or college savings. Examples include the American Funds Portfolio Series and the Target Date Retirement Series®.
• Growth and Income Funds: These funds aim to provide a combination of capital growth and income for investors. They may invest in a mix of stocks and bonds to achieve this balance.
• Tax-Exempt Bond Funds: These funds seek to provide income while also offering tax advantages. For example, the American High-Income Municipal Bond Fund® seeks to provide current income that is tax-exempt at the federal level.
• Sector-Specific Funds: American Funds offers funds that focus on specific sectors or industries, such as technology or healthcare. This allows investors to align their investments with their expertise or areas of interest.
• International Funds: For investors seeking global diversification, American Funds offers international and global funds. These funds invest in companies outside of the United States, providing exposure to different markets and economies. Examples include the International Growth and Income Fund and the American Funds® International Vantage Fund.
• Retirement and College Savings Plans: American Funds offers a range of retirement and college savings plans, such as Traditional/Roth IRAs and CollegeAmerica 529 Plans. These plans are designed to help individuals save for retirement or education expenses, often providing tax advantages.

It is important to remember that investing involves risks, and the value of investments may fluctuate. Investors should carefully consider their investment objectives, risks, charges, and expenses before investing.

Long-term focus

American Funds, a subsidiary of Capital Group, offers a range of investment options, including mutual funds, portfolio funds, and target funds. With a history dating back to 1931, the company has a strong focus on long-term investment success. This long-term perspective is evident in their investment products, which are designed to provide consistent results and value to investors.

The Investment Company of America (AIVSX) is a prominent example of American Funds' long-term focus. AIVSX, launched in 1934, is a large-blend stock fund that combines growth and income for investors. It primarily invests in well-established companies across a wide range of sectors, representing a diverse cross-section of the US economy. This fund is optimized for long-term gains, prioritizing future income over high current yield. As of May 2023, AIVSX had a total asset under management (AUM) of $110.45 billion, with 86% of its assets in US equities, demonstrating its commitment to long-term performance.

Another key aspect of American Funds' long-term focus is their investment process, which combines individual accountability with teamwork. Each manager and analyst assigned to a portfolio conducts independent research and shares information about potential investments. However, the final investment decisions are made individually within the bounds of the portfolio's objective. This approach fosters commitment investing, resulting in a more stable, diversified, and better-performing portfolio over the long term.

Capital Group's belief in long-term capital preservation and consistent performance is reflected in their investment strategies. The company's system encourages individual initiative while also benefiting from the collective wisdom of the team. This blend of autonomy and collaboration aims to create a robust and resilient investment portfolio.

American Funds also offers a range of mutual funds with different investment objectives, levels of volatility, and asset types. These funds provide investors with a variety of options to align their investments with their financial goals and risk tolerance. Whether investors seek growth and income, capital preservation, or a combination of objectives, American Funds' diverse offerings cater to long-term investment strategies.

Capital preservation

The Capital Group system combines individual accountability with teamwork. Each portfolio is managed by a team of managers and analysts who work collaboratively to research and share information about potential investments. However, the ultimate decision-making power regarding specific investments rests with individual team members, who are given a percentage of net assets to invest as they see fit within the portfolio's objectives. This commitment to individual accountability within a team framework is designed to create a more stable, diversified, and better-performing portfolio.

The Investment Company of America (AIVSX), one of the American Funds, is a large-blend stock fund that exemplifies this approach. With a focus on long-term growth and future income, AIVSX invests primarily in large, well-established companies across a wide range of sectors, representing a diverse cross-section of the US economy. This fund has a strong track record, having been in operation since 1934, and currently holds a significant amount of assets under management (AUM).

In addition to its traditional mutual funds, American Funds also offers a range of portfolio and target funds, known as "funds of funds." These funds invest in other mutual funds rather than individual securities, providing an additional layer of diversification. Overall, American Funds' approach to capital preservation is centred on a combination of teamwork, individual accountability, long-term focus, and diversification.

Individual accountability

American Funds, a subsidiary of Capital Group, offers a range of investment options, including mutual funds, portfolio funds, and target funds. The company has been in operation since 1931, providing investment services to help investors meet their financial needs and pursue long-term investment success.

The Investment Company of America (AIVSX) is one of the flagship offerings by American Funds, with a focus on investing in a diverse group of large, well-established companies across the United States. This fund combines individual accountability with teamwork, reflecting the broader philosophy of Capital Group.

The benefits of individual accountability are further enhanced by the collaborative nature of the Capital Group system. While investment decisions are made independently, managers and analysts work together to research and share information about potential investments. This teamwork ensures that individual insights and expertise are combined to make well-informed investment choices.

The combination of individual accountability and teamwork fosters a culture of commitment investing. Each member of the investment team is trusted to make decisions that align with the portfolio's goals while also benefiting from the collective knowledge and insights of their colleagues. This approach has helped American Funds, and specifically the Investment Company of America (AIVSX), deliver consistent long-term performance and capital preservation.

The individual accountability inherent in the investment process at American Funds allows for a more dynamic and responsive approach to investing. By empowering individuals to make decisions within a collaborative framework, American Funds can adapt to market changes and take advantage of emerging opportunities. This adaptability contributes to the fund's ability to generate strong returns and maintain its position as a leading investment option.

Teamwork

This approach is evident in the management of portfolios, where managers and analysts work together to research and share insights on potential investments. While the final investment decisions are left to individual discretion, the collaborative framework ensures a robust exchange of ideas and information. This teamwork is key to Capital Group's commitment to capital preservation and consistent long-term performance.

The Investment Company of America (AIVSX), a large-blend stock fund, exemplifies this team-based approach. AIVSX's fund management comprises James Lovelace and Donald O'Neal, the longest-serving managers with nearly three decades of experience each, alongside seven other managers with tenures ranging from one to twenty years. This diverse team brings a wealth of experience and perspectives to the fund's investment strategy.

The fund's investment objectives are achieved through teamwork, with each manager given a percentage of net assets to invest within the bounds of the portfolio's goals. This approach fosters a sense of commitment and ownership among the managers, resulting in a more stable, diversified, and better-performing portfolio.

American Funds' emphasis on teamwork extends beyond fund management. The company offers a wide range of traditional mutual funds, portfolio funds, and target funds, all designed with a long-term focus and a spectrum of investment objectives, volatility levels, and asset types. This diverse range of investment options is made possible by the collaboration and expertise of Capital Group's team, ensuring that investors can find options tailored to their financial needs and goals.

Frequently asked questions