American Funds Washington Mutual Investors Fund

Scorecard
4 / 5 Stars
Lipper
4 4 5 2 2
Zacks Investment Research
4 (Sell)
Standard & Poor's
4 / 5 Stars
TheStreet.com
A+ (Buy)

U.S. News evaluated 330 Large Value Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

See all American Funds funds

See full Large Value rankings

See more fund rankings

Note: Profile written for different share class.

Performance

The fund has returned 22.01 percent over the past year, 15.70 percent over the past three years, 18.01 percent over the past five years, and 7.18 percent over the past decade.

Trailing Returns Updated 06.30.2014
Year to date 6.3%
1 Year 22.0%
3 Years (Annualized) 15.7%
5 Years (Annualized) 18.0%
10 Years (Annualized) 7.2%

See more RWMCX performance

Summary

The American Funds Washington Mutual fund, like so many of its peers, found itself uncomfortably caught between a rock and a hard place during the financial crisis. This longtime stalwart has kept its laserlike focus on dividend-paying stocks, which made it almost inevitable that the fund would end up entangled in the ailing financial sector during the worst market turmoil in decades. Still, a time-tested investment style resulted in respectable returns even during several tough years. 

As of July 03, 2014, the fund has assets totaling $73.54 billion. Its portfolio consists almost exclusively of dividend-producing stocks. 

For Washington Mutual, the recession prompted a fair amount of realignment. The fund's conservative strategy requires that virtually all of its holdings be in companies that have produced dividends in nine of the past 10 years, even at a time when remnants of the downturn (plus a less dividend-friendly culture on Wall Street) have significantly reduced such payouts. Overall, 2009 was the worst year on record for dividends, but this year signs have been more encouraging. Meanwhile, an insistence on investing in mainly blue-chip companies with solid past performance has bred a tame portfolio overall, and that helped cushion the blow during the market meltdown. But it also prevented the fund from fully capitalizing on last year's rebound. So far, 2010 has been a middling year for the fund. The fund has returned 22.01 percent over the past year and 15.70 percent over the past three years.

The fund has produced solid yet hardly earth-shattering returns over the years. By focusing on companies that consistently have the strength to pay dividends, the fund has generally been able to sidestep risky companies and maintain its focus on long-term growth rather than short-term movements of the market. Notes Morningstar: "This Fund Analyst Pick has a simple strategy--it buys stocks that have paid dividends, sometimes for decades and occasionally for centuries." The fund has returned 18.01 percent over the past five years and 7.18 percent over the past decade.

Investment Strategy

The fund invests almost exclusively in dividend-paying equities as part of a plan to provide investors with both immediate income and long-term growth. According to the fund's annual report, "In order to qualify as investments for the fund, most companies must have paid a dividend in nine of the past 10 years, and their earnings per share must have covered at least the amount paid as a dividend in four of the past five years." 

Role in Portfolio

Morningstar calls it a "core" investment.

Management

The fund takes a team-based approach to management and relies on a seasoned group of investment veterans. 

Fees

The American Funds Washington Mutual Investors Fund is an affordable investment. Its expense ratio is 0.95 percent. 

See more RWMCX fees

Risk

Like any stock fund, this one comes with some risks.

See more RWMCX risk

Fund Opinions

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

Value Line 2014-06-11

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

Value Line 2014-06-11

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 2014-06-11

In the April 2010 edition of Morningstar's Fund Family Reports, John Coumarianos says, "This venerable Analyst Pick adheres to a strict dividend mandate. The longer a large-cap company has been paying and increasing its dividends, the likelier it is to wind up in this fund."

Morningstar 2010-06-02

In the annual Lipper/Barron's Fund Families Survey of 2009, American Funds ranks 31st out of 61 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, "This fund is supported by a fundholder-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 2011-02-02

In the annual Lipper/Barron's Fund Families Survey of 2009, American Funds ranks 31st out of 61 fund families surveyed.

Lipper

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, "This fund is supported by a fundholder-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 2011-02-02

Large Value Funds

Highest Returns (10-year)

See More Funds