American Balanced Fund®

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DEFINED CONTRIBUTION FOCUS FUNDS
 

A quality balanced fund aiming for

a smoother long-term ride

 

A 48-year legacy of success

Over its lifetime, American Balanced Fund has had a higher return than its blended benchmark and peers, and can serve as a QDIA.* 

Hypothetical lifetime value of $10,000 investments

Bar chart shows the hypothetical lifetime value of $10,000 investments: American Balanced Fund, $1,319,898; 60%/40% blend of S&P 500 and Bloomberg U.S. Aggregate Index (reference footnote †), $934,279; Morningstar Allocation 50%-70% Equity, $645,951.
Value of hypothetical $10,000 investments since the fund began on July 26, 1975, through December 31, 2023.

Valuable downside resilience and upside capture

Over monthly rolling 10-year periods since its inception, American Balanced Fund has captured more of its blended benchmark’s gains than losses. And while the fund has led and lagged its benchmark at different times, the fund has outpaced the index by a greater magnitude than it lagged.

Average monthly rolling 10-year periods capture ratio over fund lifetime vs. blended index

Capture ratio1

Excess return when leading/lagging index

Charts show that American Balanced Fund's downside and upside capture ratios were 99% and 98%, respectively; and that American Balanced Fund had an excess return of 1.19% when it led its benchmark index and -0.55% when it trailed its index.
Source: Capital Group. Data as of December 31, 2023. Index consists of a 60% weighting of the S&P 500 Index and 40% weighting of the Bloomberg U.S. Aggregate Index.† Up (down) capture ratio is the ratio of a portfolio’s return during periods when the index was up (down), divided by the return of the index during those periods. For example, an up-capture ratio greater than 100 indicates the portfolio produced a higher return than the index during periods when the index was up. Conversely, during periods when the index was down, a down- capture ratio greater than 100 indicates the portfolio produced a lower return than the index.

Low fees

American Balanced Fund’s expense ratio was less than half of the median for its peer group.‡ 2

Expense ratio‡ 2

Bar graph compares expense ratios: American Balanced Fund, 0.25%; Morningstar fee-level peer group median, 0.63%.
RECOGNITION
Morningstar

Morningstar Analyst RatingTM

of Silver§

Analyst-driven 100%

Data coverage 100%

Morningstar

Morningstar

“Thrilling 30” fund**

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* Plan sponsors should consult a financial professional before selecting an investment option other than a target date series as a qualified default investment alternative (QDIA).

† Blends the S&P 500 Index with the Bloomberg U.S. Aggregate Index by weighting their total returns at 60% and 40%, respectively. Results assume the blend is rebalanced monthly. The Bloomberg U.S. Aggregate Index began on January 1, 1976. For index results prior to that date, the Bloomberg Government/Credit Bond Index was used.

‡ The fund’s Class R-6 share expense ratio is as of the most recent prospectus available at the time of publication. The peer group expense ratio median was calculated based on funds in the following Morningstar Fee Level Group — Distribution category: Moderate Allocation Retirement, Large, as of March 31, 2024.

§ As of March 19, 2024, based on Class R-6 shares.

** Source: Morningstar, "The Thrilling 30" by Russel Kinnel, September 29, 2023. Morningstar's screening took into consideration expense ratios, manager ownership, returns over manager's tenure, and Morningstar Risk, Medalist and Parent ratings. The universe was limited to share classes accessible to individual investors with a minimum investment no greater than $50,000, did not include funds of funds, and must be rated by Morningstar analysts. Class A shares were evaluated for American Funds. Visit morningstar.com for more details.

Unless otherwise indicated, data is as of December 31, 2023, and fund data is for Class R-6 shares.

Bloomberg U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market.

S&P 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks.

These indexes are unmanaged, and their results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.

The Morningstar Allocation 50%–70% Equity category includes funds that typically seek to provide both income and capital appreciation by investing in multiple asset classes, including stocks, bonds and cash. These portfolios are dominated by domestic holdings and have equity exposures between 50% and 70%.

Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Investing for short periods makes losses more likely. Prices and returns will vary, so investors may lose money. View mutual fund expense ratios and returns.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
The return of principal for bond portfolios and for portfolios with significant underlying bond holdings is not guaranteed. Investments are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings.
The Morningstar Medalist Rating™ is the summary expression of Morningstar's forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar's conviction in those products' investment merits and determines the Medalist Rating they're assigned. Pillar ratings take the form of Low, Below Average, Average, Above Average, and High. Pillars may be evaluated via an analyst's qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. Vehicles are sorted by their expected performance into rating groups defined by their Morningstar Category and their active or passive status. When analysts directly cover a vehicle, they assign the three pillar ratings based on their qualitative assessment, subject to the oversight of the Analyst Rating Committee, and monitor and reevaluate them at least every 14 months. When the vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. For more detailed information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures/. The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) are not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involve the risk that the return target will not be met due to such things as unforeseen changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rates, exchange rate changes, and/or changes in political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate.
Capital Group offers a range of share classes designed to meet the needs of retirement plan sponsors and participants. The different share classes incorporate varying levels of financial professional compensation and service provider payments. Because Class R-6 shares do not include any recordkeeping payments, expenses are lower and results are higher. Other share classes that include recordkeeping costs have higher expenses and lower results than Class R-6.
There have been periods when the results lagged the index(es) and/or average(s). The indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.
Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively "Bloomberg"). Bloomberg or Bloomberg's licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg's licensors approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.
Each S&P Index ("Index") shown is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2024 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses.
Certain share classes were offered after the inception dates of some funds. Results for these shares prior to the dates of first sale are hypothetical based on the original share class results without a sales charge, adjusted for typical estimated expenses. 
  • Class R-6 shares were first offered on 5/1/2009.
Results for certain funds with an inception date after the share class inception also include hypothetical returns because those funds' shares sold after the funds' date of first offering. View dates of first sale and specific expense adjustment information.
  1. Calculated by Capital Group. Due to differing calculation methods, the figures shown here may differ from those calculated by Morningstar.
  2. Expense ratios are as of each fund's prospectus/characteristics statement available at the time of publication.
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This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.
© 2024 Morningstar, Inc. All Rights Reserved. Some of the information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar, its content providers nor Capital Group are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Information is calculated by Morningstar. Due to differing calculation methods, the figures shown here may differ from those calculated by Capital Group.