Morningstar 2011/2012 - (Page 71)
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American Funds American Mutual A
Governance and Management
Stewardship Grade: A Portfolio Manager(s) As with other American Funds, this fund’s managers oversee several portfolios. The six portfolio counselors on this offering boast a considerable amount of investment experience with the firm. One manager, James Dunton, has more than 45 years of experience. The firm’s research staff, which plays a vital role, is equally seasoned. Many analysts at the firm follow a career analyst track and have covered their respective industries for decades. Short-term performance isn’t rewarded here, as investment professionals are evaluated over rolling four-year periods. Strategy The fund aims to meet three goals: current income, capital growth, and conservation of principal. In pursuit of these objectives, management favors established, dividend-paying companies. And like most funds in the firm’s roster, management likes to buy shares on the cheap. To smooth volatility, the fund typically has a sizable cash stake. Finally, the fund won’t invest in companies that derive the majority of their revenues from tobacco or alcohol.
Ticker AMRMX
Status Open
Yield 2.5%
Total Assets $18,080 mil
Mstar Category Large Value
Investment Style Equity Stock % Manager Change Partial Manager Change
Historical Profile
Return Above Avg Risk Low Rating Above Avg
79% 85% 82% 88% 86% 77% 84% 87% 90%
15.5 12.5 Growth of $10,000 10.0
Investment Values of Fund Investment Values of S&P 500
5.0
Performance Quartile (within Category)
2000 23.87 9.12 18.22 2.11 3.14 5.98 43 0.74 1.25 0.59 3.29 29 8,515
2001 24.05 6.67 18.56 12.26 3.05 3.62 6 0.72 0.65 0.59 2.67 45 9,002
2002
2003
2004
2005
2006
2007
2008
2009
2010
08-11
History
NAV Total Return % +/-S&P 500 +/-Russ 1000 Vl Income Return % Capital Return % Total Rtn % Rank Cat Income $ Capital Gains $ Expense Ratio % Income Ratio % Turnover Rate % Net Assets $mil
Performance 08-31-11
2007 2008 2009 2010 2011
Trailing 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
1.74 -7.23 -8.47 3.15 4.88
Total Return%
6.31 -1.82 13.40 -8.34 1.57
+/S&P 500
-0.00 -6.87 12.67 10.28 .
+/- Russ 1000 Vl
-4.47 -17.52 7.25 7.63 .
%Rank Cat
3.32 -30.04 25.43 12.23 .
Growth of $10,000
20.32 24.38 26.48 26.27 29.21 28.29 19.08 23.16 25.32 24.86 -12.18 23.32 10.74 4.94 16.24 3.32 -30.04 25.43 12.23 -0.67 9.92 -5.36 -0.14 0.03 0.45 -2.17 6.96 -1.03 -2.83 1.10 3.34 -6.71 -5.75 -2.11 -6.01 3.49 6.81 5.74 -3.28 3.32 2.18 2.58 1.82 1.90 2.19 2.14 2.69 3.56 2.73 1.19 -14.36 20.74 8.92 3.04 14.05 1.18 -32.73 21.87 9.50 -1.86 6 87 73 58 74 36 8 36 68 18 0.52 0.52 0.44 0.50 0.57 0.62 0.75 0.67 0.63 0.30 0.31 0.09 0.05 1.01 0.71 1.29 0.06 0.00 0.00 0.00 0.60 0.62 0.60 0.56 0.55 0.56 0.57 0.66 0.63 . 2.15 2.32 1.97 2.06 2.31 2.09 2.28 3.05 2.69 . 31 24 17 22 19 19 23 27 20 . 8,028 10,449 12,986 14,331 16,476 16,771 11,115 12,698 13,636 13,238
Rating and Risk
Time Period Load-Adj Return % Morningstar Rtn vs Cat Morningstar Risk vs Cat Morningstar Risk-Adj Rating
Portfolio Analysis 06-30-11
Share change since 03-11 Total Stocks:132 Sector PE Tot Ret% % Assets
3 Mo -7.60 6 Mo -4.73 1 Yr 14.72 3 Yr Avg 2.25 5 Yr Avg 1.93 10 Yr Avg 4.15 15 Yr Avg 6.96
1.30 2.50 -3.78 1.71 1.15 1.45 0.83
3.61 4.72 0.35 3.70 3.55 0.74 0.07
12 12 44 11 10 21 24
9,240 9,527 11,472 10,690 11,003 15,017 27,436 90 67 76
1 Yr 3 Yr 5 Yr 10 Yr Incept
8.12 0.25 0.73 3.54 11.34
+Avg +Avg Avg
Low Low Low
Best Fit Index S&P 500
Other Measures
Standard Index S&P 500
Tax Analysis Tax-Adj Rtn%
%Rank Cat Tax-Cost Rat %Rank Cat
Alpha Beta R-Squared Standard Deviation Mean Sharpe Ratio
1.4 0.83 99 17.84 2.25 0.20
1.4 0.83 99
3 Yr (estimated) -0.83 5 Yr (estimated) -0.42 10 Yr (estimated) 2.39
33 20 35
1.08 1.14 1.11
Potential Capital Gain Exposure: 8% of assets
Morningstar’s Take by Karin Anderson 05-17-11
American Funds American Mutual makes conservative look cool. Six managers run separate sleeves of this fund. They mainly focus on dividend-paying firms, which has kept the fund’s dividend yield well above the S&P 500 Index’s over the long haul. The managers’ ability to hold a bit of cash as well as some corporate and government bonds also adds to the portfolio’s conservative slant. That combination didn’t spare this large-value fund during the most recent downturn, but the fund’s 37% loss from November 2007 through early March 2009 was several percentage points less severe than the bogy’s. The story was roughly the same during the 2000 to 2002 bear market as the fund cleaned house on a relative basis. Strong downside performance has contributed to this fund’s status as one of the smoothest large-cap options around. That profile also results from the multimanager approach used here. While each manager goes with his highest-conviction picks, the
Address: Web Address: Inception: Advisor: Subadvisor: NTF Plans: American Mutual Fund Inc Los Angeles, CA 90071-1447 800-421-0180 www.americanfunds.com 02-21-50 Capital Research and Management Company None Federated Tr NTF, Schwab Instl NTF
combination of the sleeves mutes the impact of individual stock and sector bets. Unsurprisingly, the strategy therefore scores low in terms of active share, a gauge of the portfolio’s overlap with the S&P 500 Index. (The lower a lineup’s active share, the more a fund tends to act like its benchmark.) While research suggests that higher active-share funds stand a better chance of outperforming their benchmarks over long periods, this fund has bucked that trend. Its 5% annualized gain over the past 10 years bests the bogy and the typical category entrant by 2 percentage points annualized. While investors can expect the fund’s conservative approach to hold it back during rallies, it hasn’t necessarily always been a slacker as its near top-third showing in 2009 attests. The firm has a solid reputation for retaining talented managers, and the squad of stock-pickers behind this fund deserve kudos for keeping it on track. Its low expense ratio is another plus.
Minimum Purchase: Min Auto Inv Plan: Sales Fees: Management Fee: Actual Fees: Expense Projections: Income Distribution: $250 Add: $50 IRA: $250 $250 Add: $50 5.75%L, 0.38% mx./0.23% mn. Mgt:0.26% Dist:0.23% 3Yr:$765 5Yr:$906 10Yr:$1316 Quarterly
AT&T Inc Abbott Laboratories United Technologies Corp Microsoft Corporation International Business M Kraft Foods Inc Merck & Co Inc Royal Dutch Shell PLC AD Home Depot, Inc. Bristol-Myers Squibb Com ConocoPhillips 3M Co CSX Corp The Dow Chemical Co PepsiCo Inc Chevron Corp CenturyLink Inc Union Pacific Corp Verizon Communications I Time Warner Cable Inc A
Current Investment Style Value Blnd Growth Market Cap
Large Mid Small
Comm Svs Hlth care Industrl Technology Technology Cnsmr Def Hlth care Energy Cnsmr Cyc Hlth care Energy Industrl Industrl Basic Mat Cnsmr Def Energy Comm Svs Industrl Comm Svs Comm Svs
% Sector Weightings
8.6 15.9 14.4 9.9 14.0 20.1 35.7 7.5 16.0 15.3 8.6 14.1 14.1 11.4 16.4 8.6 17.7 15.3 16.2 15.4
1.33 12.52 -3.92 -2.97 18.60 12.98 -6.06 4.18 -2.65 16.09 2.86 -1.94 3.02 -15.50 0.93 10.82 -18.56 0.91 5.16 1.38
4.02 2.47 2.42 2.38 2.38 2.25 2.24 2.19 2.06 1.87 1.75 1.60 1.59 1.44 1.20 1.16 1.14 1.13 1.06 1.06
% of Rel 3 Year Stocks S&P 500 High Low
Giant Large Mid Small Micro Avg $mil: 44,810
51.3 h Cyclical 22.12 37.8 r BasicMat 2.96 10.9 t CnsmrCyc12.41 0.0 y FinanSvs 6.75 0.0 u Real Est 0.00
0.76 1.02 6 1.41 11 0.42 4 0.00 12
3 7 1 8
Value Measures
Price/Earnings 13.25 Price/Book 2.08 Price/Sales 1.26 Price/Cash Flow 7.15 Dividend Yield % 3.11
Growth Measures %
Long-Term Erngs Book Value Sales Cash Flow Historical Erngs
Profitability
9.03 5.57 3.81 3.52 4.63
%
Return on Equity 21.66 Return on Assets 7.88 Net Margin 12.22
j Sensitive 36.50 1.16 10.17 2.54 7 3 i CommSrvs 9.76 0.91 14 7 o Energy 1.03 p Industrl 19.93 1.79 15 11 1.18 a Technlgy 11.68 0.66 12 10 1.10 1.11 k Defensive41.37 1.05 1.29 s CnsmrDef 7.84 0.65 14 10 d Hlthcare 11.27 0.95 8 5 Rel Category f Utilities 7.22 2.00 8 7 0.99 1.74 5.95 Composition - Net Cash 5.4 9.51 Stocks 90.1 4.68 Bonds 3.5 Other 1.0 Rel Category 1.20 Foreign 5.5 (% of Stock) 1.20 1.04
Rel Category
10
EQ
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timely. Past performance is no guarantee of future results. Access updated reports at mfb.morningstar.com. To order reprints, call 312-696-6100.
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