American Funds American Mutual Fund

Scorecard
3 / 5 Stars
Lipper
2 1 5 5 3
Zacks Investment Research
3 (Hold)
Standard & Poor's
3 / 5 Stars
TheStreet.com
C+ (Hold)

U.S. News evaluated 326 Large Value Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Note: Profile written for different share class.

Performance

The fund has returned 19.83 percent over the past year, 12.24 percent over the past three years, 19.09 percent over the past five years, and 6.44 percent over the past decade.

Trailing Returns Updated 02.28.2014
Year to date 0.2%
1 Year 19.8%
3 Years (Annualized) 12.2%
5 Years (Annualized) 19.1%
10 Years (Annualized) 6.4%

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Summary

At American Funds American Mutual Fund, conservatism reigns supreme. 

As of March 05, 2014, the fund has assets totaling $30.94 billion. Its portfolio consists primarily of blue-chip stocks.

The recession hampered some companies' ability to pay dividends, but American Mutual's management remains confident in the value of investing in stocks that provide income. This large-value fund's analysts are counting on investors appreciating dividends more as the steady income provides a cushion in tough times. In addition to a continued focus on income, the fund also made smart use of its cash holdings during the downturn, keeping a fair amount on hand to reduce volatility. As the market improved, the fund whittled down its cash position. Meanwhile, the fund's technology picks led to encouraging results in 2009. The fund has returned 19.83 percent over the past year and 12.24 percent over the past three years.

Historically, the fund has a long track record of careful, conservative picks. Management has traditionally favored blue-chip stocks like AT&T and Microsoft. It also invests with value and dividends in mind. Overall, results have been solid, but conservatism comes with a price during bull markets. Says Morningstar: "A penchant for income and safety can hold this fund back a bit when stocks rally. But its cautious approach was a boon during the market's downturn." The fund has returned 19.09 percent over the past five years and 6.44 percent over the past decade.

Investment Strategy

Management looks for established companies with attractive values, good cash flows, and staying power. Says Value Line, "The fund seeks a three-pronged goal of current income, growth of capital, and conservation of principal. . . . In selecting stocks, management compiles a list of eligible companies, based on growth potential and safety of dividends, then chooses from the list."

Role in Portfolio

Morningstar calls it a "core" investment.

Management

American family funds use a team-based approach to management and rely on a seasoned group of investment managers. This fund has six co-managers. While four of the managers have less than five years of experience on the fund, co-manager James Dunton has been with the fund for 39 years, and co-manager R. Michael Shanahan has been there for nearly 25 years.

Fees

American Funds American Mutual Fund has an expense ratio of 1.42 percent.

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Risk

This fund's conservative strategy makes it a relatively safe pick. 

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 3 for one year, 3 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Risk Rank, a measure of volatility, is 2 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-03-12

The fund appears on the 2011 Money 70 list of recommended mutual and exchange-traded funds.

Money 70

In the April 2010 edition of Morningstar's Fund Family Reports, John Coumarianos says, "It seeks to provide growth, income, and stability of principal—no small feat—but one should treat it as a pure stock fund and expect it to have almost as much volatility, despite some bond and cash exposure."

Morningstar 2010-06-02

In the annual Lipper/Barron's Fund Families Survey for 2010, American Funds ranks 49th out of 57 fund families surveyed.

Lipper

Morningstar gives it an A in stewardship on an A to F scale, saying, "This fund is supported by a shareholder-focused corporate culture and a fund board led by an independent chairman. Its fees also are reasonable. Overall, it's a strong steward of capital."

Morningstar 2010-03-31

In the annual Lipper/Barron's Fund Families Survey for 2010, American Funds ranks 49th out of 57 fund families surveyed.

Lipper

Morningstar gives it an A in stewardship on an A to F scale, saying, "This fund is supported by a shareholder-focused corporate culture and a fund board led by an independent chairman. Its fees also are reasonable. Overall, it's a strong steward of capital."

Morningstar 2010-03-31