How Risky Is Investing in a Mutual Fund From American Funds?


Quick Answer

As of April 2015, a mutual fund from American Funds is considered to have an average risk factor, according to U.S. News & World Report. While not overly risky, this investment does adjust with changes in the market.

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Full Answer

Based on the fund's Value Line Risk Rank, American Funds American Mutual Fund is a 2, meaning it has a low risk of unpredictable change. American Funds American Mutual Fund is rated in the top third for all large value funds, explains U.S. News & World Report. This fund combines stocks from several top equity holdings, among which are Home Depot, Verizon and Texas Instruments.

One of the reasons for the average risk rating is the careful approach the company takes in the stock market. The diversification of stocks and cash holdings also helps to reduce risk. When a certain sector of the market is not producing, the company moves away from it. Since 2005, investors have seen a nearly 8 percent return, with a 13 percent return since 2010, notes U.S. News & World Report. American Funds focuses on common stocks, U.S. government securities and investment-grade bonds. It also focuses on conserving its principal, growing capital and maintaining current income. The fund itself has assets totaling several millions of dollars.

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