American Funds by Capital Group

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edvest
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American Funds by Capital Group

Post by edvest »

My company just changed our 401k over to American Funds by Capital Group

I never heard of them before that, and 15 out of the thirty or so choices we get are target funds.
Do you think they are a good company?
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vineviz
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Re: American Funds by Capital Group

Post by vineviz »

I'd say most people consider them to be a reputable company, with mostly decent actively managed funds that have relatively high expenses compared to similar index funds.
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sometimesinvestor
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Re: American Funds by Capital Group

Post by sometimesinvestor »

Their expense ration while not as low as Vanguards is not high compared to many other fund families and some of their funds have outperformed the indices over time
Freefallin
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Re: American Funds by Capital Group

Post by Freefallin »

They are a solid company. I had them with my previous employer. Their target date funds are ok if they are "R" class funds with a .41 expense ratio. Does your 401k offer any index fund options? If not, I would just contribute everything to the target date fund.
Last edited by Freefallin on Mon Oct 08, 2018 8:36 pm, edited 1 time in total.
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Toons
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Re: American Funds by Capital Group

Post by Toons »

Excellent Company
:happy
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Tamahome
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Re: American Funds by Capital Group

Post by Tamahome »

I have been very happy with that company and with their funds.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.
TigerNest
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Re: American Funds by Capital Group

Post by TigerNest »

They're one of the most reputable and respected active managers in the US.

They have $1.7 trillion in assets under management, which puts them in the top 10 of asset managers by size, larger than Wellington and T. Rowe Price but smaller than Fidelity.
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Charles Joseph
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Re: American Funds by Capital Group

Post by Charles Joseph »

American Funds is a great company. Many of their target date funds consistently outperform Vanguard's.
edvest wrote: Mon Oct 08, 2018 6:46 pm My company just changed our 401k over to American Funds by Capital Group

I never heard of them before that, and 15 out of the thirty or so choices we get are target funds.
Do you think they are a good company?
"The big money is not in the buying and selling, but in the waiting." - Charles Munger
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nedsaid
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Re: American Funds by Capital Group

Post by nedsaid »

Hopefully you will get access to the cheaper F2 class in your 401(k).

This is a very good fund group, other than Vanguard's low-cost active funds and T. Rowe Price, they are as good as it gets for Active Funds.
A fool and his money are good for business.
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Charles Joseph
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Re: American Funds by Capital Group

Post by Charles Joseph »

nedsaid wrote: Tue Jul 19, 2022 4:51 pm Hopefully you will get access to the cheaper F2 class in your 401(k).

This is a very good fund group, other than Vanguard's low-cost active funds and T. Rowe Price, they are as good as it gets for Active Funds.
I have the cheapest R6 class in my 401k at Fidelity. The 2025 TF from American Funds had done very well.
"The big money is not in the buying and selling, but in the waiting." - Charles Munger
hnd
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Re: American Funds by Capital Group

Post by hnd »

they are solidly run and I'm a giant fan of the way they construct their funds. They are an older fund family and skyrocketed to be one of the largest after they basically avoided the dot com bubble in most of their offereings. I think their misstep was that money poured in for the next 5 years and IMO their flagship funds became a bit too large and have now become nothing more than closet index funds that haven't faired well against their indexes.

Obviously its likely preferable to have index options but you could do much much worse. Their target dates have lower international investing than most and don't really ramp up bonds until later on. That is what I'd choose as constructing a portfolio can be odd as outside of washington, american mutual, investment of america and growth fund of america the rest are very much global type funds with US and exUs investments.
Vanguard User
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Re: American Funds by Capital Group

Post by Vanguard User »

At EJ they are loaded funds and high ER.
hoofaman
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Re: American Funds by Capital Group

Post by hoofaman »

Have you reviewed the investment options yet?

An old employer used them as our 401k admin, one of the options in the plan was Vanguards S&P500 Fund so I just put 100% into that
exodusNH
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Re: American Funds by Capital Group

Post by exodusNH »

Vanguard User wrote: Tue Jul 19, 2022 5:31 pm At EJ they are loaded funds and high ER.
Those are the class A shares.

The retirement shares, especially R6, are much better, fee wise.

As someone else noted, the funds have basically mirrored index funds in recent years. It seems a lot of their outperformance is from their early days.

They also do weird combinations. One of their "international funds" is 40%ish US funds. When you compare performance with 100% international, it looks like they crush it, when in reality, it was the US funds propping up the returns.

There are worse TDFs to have, though.

Note this is a resuscitated thread from 2018.
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Re: American Funds by Capital Group

Post by Vanguard User »

exodusNH wrote: Tue Jul 19, 2022 5:40 pm
Vanguard User wrote: Tue Jul 19, 2022 5:31 pm At EJ they are loaded funds and high ER.
Those are the class A shares.

The retirement shares, especially R6, are much better, fee wise.

As someone else noted, the funds have basically mirrored index funds in recent years. It seems a lot of their outperformance is from their early days.

They also do weird combinations. One of their "international funds" is 40%ish US funds. When you compare performance with 100% international, it looks like they crush it, when in reality, it was the US funds propping up the returns.

There are worse TDFs to have, though.

Note this is a resuscitated thread from 2018.
Nice.
Varsh
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Re: American Funds by Capital Group

Post by Varsh »

The American Funds is great family of mutual funds. I’ve invested with them for more than thirty years. Very reputable, very conservative in their investment and fiduciary practices. Do not worry about them managing your money.
JAusten
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Re: American Funds by Capital Group

Post by JAusten »

Whenever I've used an advisor I've been placed into one of the American Funds. Many advisors use American Funds since they are considered one of the load fund families as opposed to no load. There is a sales charge or load of course and the expense ratio.

Kiplinger's magazine always has the '20 Largest Stock and Bond Mutual Funds' listed according to assets in billions. Vanguard is usually at the top with VTSAX & VFIAX with Fidelity 500 Index before Vanguard Total Intl Stock Idx Adm. After these funds usually there are American Funds (6) in the August 2022 issue. I believe the American Funds are listed because most brokerage firms sell them since the seller does receive money from the sales load.

After I learned more about investing which took many many years I found out about Vanguard, TR Price, and Fidelity - the no-load firms. After I had been taken advantage of I decided that I had to take over all of my money and learn to invest myself. I found out that sadly I could not depend on anyone but myself.

I continue to learn and enjoy reading the Bogleheads Forum. Thank goodness for John Bogle! I also read Kiplinger's magazine and sometimes Money magazine. These are at all public libraries for free. Taylor Latimore's investing journey made me feel almost normal. I've learned about Clark.com out of Atlanta too.

How many people learn about 'how to invest' unless maybe you graduate in Finance or a relative teaches you? Schools should begin teaching about investing as early as possible since so many graduates, college as well as high school, can provide for food, shelter, and clothing but do not have a clue about where to put their money to earn money! It reminds me of an Easter Egg Hunt!

Hopefully, things will change...
JAusten
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Charles Joseph
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Re: American Funds by Capital Group

Post by Charles Joseph »

Varsh wrote: Tue Jul 19, 2022 6:00 pm The American Funds is great family of mutual funds. I’ve invested with them for more than thirty years. Very reputable, very conservative in their investment and fiduciary practices. Do not worry about them managing your money.
I totally agree. They are my only target date option and the R6 ER is .31%. Reasonable in my opinion. It goes down as you go along toward your retirement date. For example, ten years past retirement the ER is .28%.

Of course these are no load funds with relatively low ERs. I know that's not always the case.
"The big money is not in the buying and selling, but in the waiting." - Charles Munger
exodusNH
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Re: American Funds by Capital Group

Post by exodusNH »

JAusten wrote: Tue Jul 19, 2022 6:37 pm Whenever I've used an advisor I've been placed into one of the American Funds. Many advisors use American Funds since they are considered one of the load fund families as opposed to no load. There is a sales charge or load of course and the expense ratio.

Kiplinger's magazine always has the '20 Largest Stock and Bond Mutual Funds' listed according to assets in billions. Vanguard is usually at the top with VTSAX & VFIAX with Fidelity 500 Index before Vanguard Total Intl Stock Idx Adm. After these funds usually there are American Funds (6) in the August 2022 issue. I believe the American Funds are listed because most brokerage firms sell them since the seller does receive money from the sales load.

After I learned more about investing which took many many years I found out about Vanguard, TR Price, and Fidelity - the no-load firms. After I had been taken advantage of I decided that I had to take over all of my money and learn to invest myself. I found out that sadly I could not depend on anyone but myself.

I continue to learn and enjoy reading the Bogleheads Forum. Thank goodness for John Bogle! I also read Kiplinger's magazine and sometimes Money magazine. These are at all public libraries for free. Taylor Latimore's investing journey made me feel almost normal. I've learned about Clark.com out of Atlanta too.

How many people learn about 'how to invest' unless maybe you graduate in Finance or a relative teaches you? Schools should begin teaching about investing as early as possible since so many graduates, college as well as high school, can provide for food, shelter, and clothing but do not have a clue about where to put their money to earn money! It reminds me of an Easter Egg Hunt!

Hopefully, things will change...
JAusten
It's not just the load. Many of the share classes also have 12b-1 fees, allowing the advisor to get recurring income.
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Charles Joseph
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Re: American Funds Beats Vanguard TDFs

Post by Charles Joseph »

exodusNH wrote: Tue Jul 19, 2022 8:50 pm It's not just the load. Many of the share classes also have 12b-1 fees, allowing the advisor to get recurring income.
Yet again the target date funds to pretty much consistently beat Vanguard. And many of the share classes don't have 12b-1 fees.
"The big money is not in the buying and selling, but in the waiting." - Charles Munger
exodusNH
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Re: American Funds Beats Vanguard TDFs

Post by exodusNH »

Charles Joseph wrote: Wed Jul 20, 2022 3:39 pm
exodusNH wrote: Tue Jul 19, 2022 8:50 pm It's not just the load. Many of the share classes also have 12b-1 fees, allowing the advisor to get recurring income.
Yet again the target date funds to pretty much consistently beat Vanguard. And many of the share classes don't have 12b-1 fees.
I wasn't disputing that. I was point out that the reason these funds are widely offered by various financial advisors is because they get paid by the funds to do so.

I had your standard "advisor six pack" of American Funds for about 15 years. They did fine, but not better than any of the index funds when they were compared against appropriate benchmarks. E.g., one of their "international funds" was half US, which obviously crushed every other true international fund over the last decade.

If you look at the last 20 or 30 years, their flagship fund hasn't really done better than a standard total market fund.

They're not bad funds. They're just nothing special in the universe of funds, but likely better than most managed ones.
hnd
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Re: American Funds by Capital Group

Post by hnd »

Charles Joseph wrote: Tue Jul 19, 2022 2:12 pm American Funds is a great company. Many of their target date funds consistently outperform Vanguard's.
edvest wrote: Mon Oct 08, 2018 6:46 pm My company just changed our 401k over to American Funds by Capital Group

I never heard of them before that, and 15 out of the thirty or so choices we get are target funds.
Do you think they are a good company?
this is because they don't invest in as many bonds and Vanguards and about 10% less international. Which is fine if thats the allocation you are looking for. (I don't like VG allocations to bonds and exUS for the record)
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retired@50
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Re: American Funds by Capital Group

Post by retired@50 »

Did someone just resurrect an old thread on American Funds just to talk them up...???

This thread is from October, 2018. Zombie...

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