Is American Funds a Safe Investment Platform?


Quick Answer

American Funds has been an investment firm since 1931, when Jonathan Bell Lovelace started the company, according the firm's website. American Funds lost more than $246 billion in investments from 2007 to 2013, but the company remains one of the largest firms of its kind in America, notes Kiplinger.

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American Funds touts its long-term growth strategies that beat most forecasts, states Kiplinger. The firm held $1.2 trillion in assets in October 2007, before the economic downturn caused values to lower significantly. As of September 2013, the firm still retained more than $1 trillion in investor capital.

American Funds owns one of the largest mutual funds in the United States, notes Forbes. The company's Growth Fund of America contains 65 percent of its assets in the form of common stocks and was worth $115 billion in 2012. Forbes calls the long-term growth of this fund "strong" but the initial investment "very expensive."

The firm's AMCAP fund is ranked 59th among large-growth funds in the United States by U.S. News & World Report. The fund contains nearly $44 billion in assets as of February 2015, and investments have returned 11.77 percent from 2014 to 2015, and 18 percent from 2012 to 2015.

American Funds chooses its stock portfolios by examining a company's financial data, according to Bloomberg. This style of investing is called active management, which was touted in 2013 when the firm released a study on the long-term viability of 17 of its funds.

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