5 Best American Funds
These American Funds Have the Best Chance of Performing Well in the Long Run
The best American Funds to hold are some of their oldest mutual funds with established track records. These are the best types of funds for long-term investors, such as those saving for retirement. American Funds are sold primarily by brokers and they are often found in 401(k) plans all around the U.S.
5 of the Best American Funds to Hold for Long-Term Investors
Some of the best qualities of American funds is that they are mostly team-managed, they have below-average expense ratios, and they often produce above-average returns for periods of 10 to 15 years or more. This makes mutual funds from the American Funds family good investments for long-term investors.
With these qualities in mind, here are some of the best American Funds to consider:
- American Funds Growth Fund of America (AGTHX): As the name suggests, AGTHX primarily invests in large-cap growth stocks like Amazon (AMZN) and Alphabet (GOOG). However, AGTHX often holds up to 10% foreign stocks, which may be an advantage or disadvantage, depending upon the performance of foreign stocks compared to U.S. stocks. AGTHX does tend to outperform category averages in the long run, though, especially for periods up to 15 years or more. In shorter periods, AGTHX will likely fluctuate around average but this is a good quality like that of an index fund.
- American Funds Fundamental Investors (ANCFX): This fund invests in a blend of growth and value large-cap stocks. Therefore you'll get stock holdings like Microsoft (MSFT) and Home Depot (HD). Performance for ANCFX does fluctuate but it's one of the best performers at American Funds. 10-year returns average more than 12%.
- American Funds SMALLCAP World (SMCWX): This fund is a World Stock fund, which means it will invest in U.S. stocks as well as foreign stocks. SMCWX also concentrates its holdings on smallcap stocks, which adds more market risk compared to large-cap stocks but long-term returns can potentially be higher.
- American Funds EuroPacific Growth (AEPGX): This fund is one of just a handful of foreign stock funds offered at American Funds and it's one of their best. AEPGX invests primarily in large-cap stocks outside of the U.S. Regional exposure focuses on Asia emerging markets and Europe. AEPGX is another example of American funds that rarely perform at the top of their category but consistently produce above-average returns, especially for long-term periods.
- American Funds Investment Company of America (AIVSX): This is another large-blend fund like ANCFX and it's another in the American Funds lineup that is a solid long-term performer. AIVSX rarely holds less than 90% domestic stocks and most are large companies like MSFT and ExxonMobil (XOM).
Mutual funds in the American Funds family are broker-sold funds that typically have fees attached to them, unless purchased in a 401(k) plan. All five of the above American funds are front-load funds, which means they charge a fee, usually 5.00% to 5.75%, when buying shares. American funds also have other share classes that have may waive the load. However, after fees, some investors may still find these funds attractive, especially for long-term holding periods.
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.