2 American Funds American Mutual A (AMRMX) This is a risk-averse, mostly domestic large-value fund. Its $250 minimum investment and 0.62% fees are attractive, complementing the 62-year-old fund’s consistent approach. Its multi-manager team invests in financially stable companies that have an average market cap of $44 million; 83% are domestic and have a history of paying dividends. Its largest holdings are in Abbott Labs, Amgen, and Home Depot; the largest sectors are pharmaceuticals, oil and gas, and diversified telecommunications. The $22.7 billion fund’s managers conserve cash or bonds when investment opportunities are scant or market conditions foreshadow change. While past performance doesn’t ensure future returns, this fund has been slightly above or below its S&P 500 benchmark since 2009. Year-to-date performance is 9.22% versus 14.29% for the S&P 500. Creuzot says the fund’s “flexibility tempered by management’s decision-making process has helped reduce downside capture in recent difficult markets.â€
Yield: 2.36%
One-year return: 10.65%
Three-year return: 9.95%
Five-year return: 2.62%
Minimum taxable investment: $250
Expense ratio: 0.62%
3 Harbor Capital Appreciation (HCAIX) Creuzot likes this domestic large growth fund for younger, long-term investors because of its “occasional inherent volatility,” she says, which younger investors can ride out. She believes that the success of the 10-year-old fund stems from its disciplined, strategic management by a veteran analyst at Jennison Associates, a subadvisory and asset management firm. Its holdings include large growth companies such as Apple, EMC, and Google that have a projected earnings growth rate of one-and-a-half to two times the market. The managers of the $16.4 billion growth fund project trends one to three years out instead of quarterly. Creuzot likes its “consistency in style as a true large growth position. Once a client’s portfolio is modeled up, I don’t want to be concerned with drift into, say, large value or other spaces.”
Yield: 0.00%
One-year return: 4.95%
Three-year return: 8.44%
Five-year return: 2.57%
Minimum taxable investment: $2,500
Expense ratio: 1.05%