As you can see, an investment manager with a proven track record of outpacing the market can produce significantly greater wealth than an index investment.
A comparison of the lifetime results of the first index fund to the results of five American Funds over that same period illustrates our advantage. Those funds are AMCAP Fund, American Mutual Fund, The Growth Fund of America, The Investment Company of America and Washington Mutual Investors Fund. The comparison is especially apt as that index fund was designed to track the S&P 500, which is also the benchmark for the five American Funds which seek to pursue investment objectives such as growth, income or preservation of capital. Watch and see how the American Funds fared since the index fund’s inception — from August 31, 1976, through June 30, 2018:
1 Figures shown are for the period August 31, 1976, the inception date of the first index fund, through June 30, 2018. Standard deviation is a measure of how returns over time have varied from the mean and is one of the most common measures of absolute volatility. A lower number signifies lower volatility.
2 The Vanguard 500 Index Fund has no up-front sales charge.
3 Portfolio turnover for the Vanguard Fund is as of December 31, 2017.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Expense ratios are as of each fund’s prospectus available at time of publication. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see americanfunds.com for more information. Source for industry average expense ratios is Lipper, based on comparable categories for front-end load funds (except for the Vanguard fund, which is no load, not front-end load), excluding funds of funds, as of each fund’s most recent fiscal year-end available as of June 30, 2018. The Lipper categories for the funds are: AMCAP Fund (Growth); The Growth Fund of America (Large-Cap Growth); The Investment Company of America, Washington Mutual Investors Fund and American Mutual Fund (Growth & Income); and Vanguard 500 Index Fund (S&P 500 Index Objective Funds).
Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group which receives fees for managing, distributing and/or servicing its investments.
©2018 Morningstar, Inc. All rights reserved. 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 nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. These numbers were calculated by the Capital Group based on underlying Morningstar data.
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 or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing.
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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.