Why We Highly Rate American Funds American Mutual

Key Morningstar Metrics for American Funds American Mutual

• Morningstar Medalist Rating: Gold
• Process Pillar: Above Average
• People Pillar: High
• Parent Pillar: High

Seasoned investors steer American Funds American Mutual’s RMFGX risk-conscious approach, making it a solid long-term option.

This fund benefits from an experienced management crew. The eight-person management team includes industry veterans, three of whom have been on the fund for more than 15 years; all have at least 20 years of investment experience. While tenured manager James Terrile stepped off the fund and retired from the firm on June 1, 2025, the remaining managers were well equipped to take over his allocation.

The fund’s conservative approach can sometimes leave it out of step with market trends, but it has demonstrated value over the long term. Like sibling American Funds Washington Mutual RWMGX, it focuses on dividend-paying industry leaders. This fund has a higher income target, and its managers don’t need to stay fully invested. The fund’s eligibility list, which contains around 300 companies, requires firms to have an investment-grade credit rating and be industry leaders. This has typically led the fund to land near the large-value and large-blend border of the Morningstar Style Box.

The portfolio especially shines in market downturns. In the past 10 market declines of 10% or more, it has beaten its Russell 1000 Value Index Morningstar Category benchmark. In 2022, the R6 shares’ 4.2% decline lost less than the index’s 7.5% drop and the S&P 500 prospectus benchmark’s 18.1% loss and landed in the large-value category’s top 40%. In 2025’s first four months, the fund’s 0.3% gain bested the value index’s 1.0% decline and the S&P 500’s 4.9% loss.

The fund won’t shine in rallies, but it tends to be competitive over a cycle. For example, in 2023, it lagged both indexes and landed in the bottom half of the large-value category. From the early-2006 start date of the two longest-tenured managers through July 2025, the R6 shares’ 9.3% annualized gain trailed the S&P 500’s 10.8% gain, but it beat the Russell 1000 Value Index’s 8.0%. It was about one-fifth less volatile than both indexes, resulting in better risk-adjusted returns versus the value index and the S&P 500.

This fund remains an excellent long-term option for risk-averse investors.

American Funds American Mutual: Performance Highlights

The fund’s dividend-focused approach and ability to hold sizable cash and bond stakes have helped it hold up well in downturns. In the last 10 market declines of 10% or more, it has beaten its Russell 1000 Value Index category benchmark. In 2022, the R6 shares’ 4.2% decline lost less than the index’s 7.5% drop and its S&P 500 prospectus benchmark’s 18.1% loss and landed in the large-value category’s top 40%.

The fund’s defensive posture means that it often lags in market rallies, as in 2020 after the market bottomed in March or in 2021. In 2023, as growth stocks rebounded, the fund lagged the S&P by almost 17 percentage points. The posture can lead to extended underperformance, which was pronounced in the 1990s. With profitless tech firms soaring at the end of that decade, the fund’s return fell far short of the index’s. Over the next decade, however, the fund excelled as the internet bubble burst, and it weathered the 2007-09 credit crisis better than most.

Competitive risk-adjusted performance continues under the current team. While the R6 shares’ 9.3% annualized gain from the early 2006 start date of the two longest-tenured managers through July 2025 trailed the S&P 500 by 1.5 percentage points, it beat the Russell 1000 Value Index by 1.2 percentage points and was about one-fifth less volatile than both indexes, resulting in better risk-adjusted returns.