American Funds Profile

Learn More About American Funds Before Investing

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Learn more about investing in American Funds. Getty Images

American Funds is one of the biggest mutual fund companies in the world. The funds are managed by Capital Research & Management Company, part of the Capital Group Companies.

Unlike some investment firms, the company does not advertise and it sells its funds through large brokerage firms, such as Edward Jones, rather than marketing directly to do-it-yourself investors.

Although there are less than 50 mutual funds in the American Funds lineup, each offering has several different fund share classes that have various fee structures designed to compensate advisors selling the funds.

To accommodate the demand for no-load funds, especially in 401(k) plans, American Funds created the R-share class, which enables brokers to get paid in other ways, such as 12b-1 Fees. For example you may have seen American Funds Growth Fund of America or American Funds Fundamental Investors or American Funds Small Cap World in either R1, R2, R3 or R4 share classes.

American Funds combines low expenses with high manager tenure. They incentivize managers to keep their priorities aligned with investors by encouraging them to buy and hold shares of the funds they manage. Their team approach to management allows for a smart process of research and analysis that enables even the largest of their funds to maintain solid, benchmark-beating performance over the long term.

Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.