These American Funds Have the Best Chance of Performing Well in the Long Run ••• See some of the best American funds to buy. Getty Images
The American Funds family of mutual funds is one of the largest in the world. Their funds are sold primarily by brokers and they are often found in 401(k) plans all around the U.S.
Some of the best qualities of American funds is that they are mostly team-managed, they have below-average expense ratios, and are often top performers, especially for long-term periods like 10 years.
Therefore American funds are good choices for long-term investors, such as those saving for retirement.
With that in mind, in no particular order, I give you...
The 5 Best American Funds to Hold for the Long Run
- American Funds Growth Fund of America (AGTHX): As the name suggests, AGTHX primarily invests in large-cap growth stocks like Amazon (AMZN) and Alphabet (GOOG). However AGTHX often holds up to 10% foreign stocks, which may boost returns at times but it can also drag returns down. AGTHX tends to outperform in the long run, though, especially for periods up to 15 years or more. In shorter periods, AGTHX will likely fluctuate around average but this is a good quality like that of an index fund.
- American Funds Fundamental Investors (ANCFX): This fund is classified by Morningstar as "large blend," which means it invests in a blend of growth and value large-cap stocks. Therefore you'll get stock holdings like Microsoft (MSFT) and Home Depot (HD). Performance for ANCFX does fluctuate but it's one of the best performers at American Funds. For 10- and 15-year returns ANCFX has historically outperformed 80% or more of other large blend funds.
- American Funds Smallcap World (SMCWX): This fund is a World Stock fund, which means it will invest in U.S. stocks as well as foreign stocks. SMCWX also concentrates its holdings on small-cap stocks, which adds more market risk compared to large-cap stocks but long-term returns can potentially be higher, which is the case with SMCWX.
- American Funds EuroPacific Growth (AEPGX): This fund is one of just a handful of foreign stock funds offered at American Funds and it's one of their best. AEPGX invests primarily in large-cap stocks outside of the U.S. Regional exposure focuses on Asia emerging markets and Europe. AEPGX is another example of American funds that rarely perform at the top of their category but consistently produce above-average returns, especially for long-term periods.
- American Funds Investment Company of America (AIVSX): This is another large-blend fund like ANCFX and it's another in the American Funds lineup that is a solid long-term performer. AIVSX rarely holds less than 90% domestic stocks and most are large companies like Verizon (VZ) and Philip Morris (PM).
All five of the above American funds are front-load funds, which means they charge a fee, usually 5.00% to 5.75%, when buying shares. American funds also have other share classes that have may waive the load.
Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.