American Funds New Perspective Fund

Scorecard
4 / 5 Stars
Lipper
5 5 4 5 1
Zacks Investment Research
2 (Buy)
Standard & Poor's
5 / 5 Stars
TheStreet.com
C+ (Hold)

U.S. News evaluated 304 World Stock 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 21.90 percent over the past year, 12.31 percent over the past three years, 15.96 percent over the past five years, and 9.43 percent over the past decade.

Trailing Returns Updated 06.30.2014
Year to date 3.6%
1 Year 21.9%
3 Years (Annualized) 12.3%
5 Years (Annualized) 16.0%
10 Years (Annualized) 9.4%

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Summary

American Funds New Perspective offers investors a stake in equities around the world—including a healthy chunk in the United States—and a history of consistent long-term returns. As of the end of June, the fund has posted an annualized return of 12.6 percent since its inception in 1973.

As of July 03, 2014, the fund has assets totaling $57.12 billion. Its portfolio of equity holdings includes a small stake in emerging markets.

Recently, the fund added to its tech holdings. As of the end of March, many of its top holdings such as Microsoft, Cisco, and Google are in the sector. Management maintains a globally diversified portfolio that includes names like Honda and Petrobras (Brazil). The fund "has a long record of fully participating in uptrends, while limiting losses in bear markets," according to Morningstar. It has returned 21.90 percent over the past year and 12.31 percent over the past three years.

Generally, the fund's value-minded management keeps about a third of its assets in U.S. companies and the rest in foreign stocks, and it sticks mostly to blue-chip names that are facing some near-term obstacles, according to Morningstar. Management aims to capitalize on companies it believes to be undervalued and generally holds stocks for a fairly long time. "It was designed to have that multinational global flavor, not only in terms of the scope of its investment horizon but the types of companies that it invests in," says Dale Hanks, vice president of Capital Research and Management. Unlike many funds, management usually maintains a large cash position (in the high double digits or low single digits) that allows it to pounce on opportunities. The fund has returned 15.96 percent over the past five years and 9.43 percent over the past decade.

Investment Strategy

Raymond James says, "Management teams at American Funds search the globe for what they believe to be high-quality companies trading at attractive valuations, with the intention of holding these stocks in the portfolio for an average of four to six years."

Role in Portfolio

Morningstar assigns the fund a "core" role in portfolio, saying, "The fund is a fine choice for the meaty portion of investors' portfolios."

Management

Like other funds in the American family, this one is run by a team of "counselors" instead of a single manager. The team is composed of eight portfolio managers from the fund's adviser, Capital Research and Management, which has managed the fund for more than 30 years.

Fees

American Funds New Perspective Fund has an expense ratio of 0.45 percent.

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Risk

Morningstar says the fund makes occasional large sector bets, which can be risky. At times, management keeps upwards of 10 percent of its assets in cash or cash equivalents.

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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 3 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, 3 for five years, and 1 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 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-06-11

Morningstar gives this fund a stewardship rating of A on a scale of A to F, saying, “This fund is supported by a fund-holder-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 2011-02-01

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

2010-02-17

Morningstar gives this fund a stewardship rating of A on a scale of A to F, saying, “This fund is supported by a fund-holder-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 2011-02-01

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

2010-02-17