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Why I Love the American Funds
Just to be on the safe side, let me say from the beginning that I am not a licensed financial adviser and cannot give financial advice. Before investing in any securities, I highly recommend consulting a licensed representative.
That said, one of my regular duties at my employer is to compare the performance of funds that a client has in his or her portfolio with a comparable fund at the American Funds so he can discuss the differences with them during their appointment. Each time I do it, I’m a little more impressed with the American Funds and understand a little better why he sells them exclusively despite being registered to sell for several other fund companies through his broker-dealer.
For example, a recent client is invested heavily in RiverSource funds through Ameriprise. Morningstar.com gives me the following hypothetical graph;
RiverSource Growth fund - A Shares - INIDX
I compare that to an American Fund in the same Morningstar category, the Growth Fund of America;
American Funds Growth Fund of America - A Shares - AGTHX
It’s not even close. Not only is the Growth Fund of America outperforming the Riversorce Growth fund, but it’s outperforming the rest of the category and even the S&P 500 index — by a lot.
Of course, total returns aren’t everything, but they can still give a pretty good idea where a fund stands in comparison to other funds like it.
I’ll probably reference the American Funds frequently when writing about Financial topics in this blog. Hopefully this post will help you understand why.