AWSHX
American Funds Washington Mutual-A
Introduction to American Funds Washington Mutual-A
The American Funds Washington Mutual-A (AWSHX) is a mutual fund designed to provide investors with both income and growth of principal. It achieves this by investing primarily in common stocks of well-established companies listed on the New York Stock Exchange. These companies are selected based on their strong record of earnings and dividends, making AWSHX a suitable choice for investors seeking a blend of growth and income. As a large-cap fund, it focuses on companies with significant market capitalization, providing stability and potential for capital appreciation. With an expense ratio of 0.56%, AWSHX offers a cost-effective way to gain exposure to high-quality stocks.
At A Glance
Executive Summary
AWSHX offers a balanced approach with a 0.56% expense ratio, focusing on established NYSE stocks for growth and income.
Established companies with strong earnings and dividends. Competitive expense ratio of 0.56%. Strong sector diversification with a focus on technology and healthcare.
Negative alpha and Sharpe ratio indicate potential underperformance. High correlation with the S&P 500 may limit diversification benefits. Max drawdown of -5.7% suggests potential volatility.
Performance Analysis: Navigating Market Dynamics
AWSHX has demonstrated robust performance over various time frames, with a notable 1-year return of 30.92%. This performance, however, is slightly below its benchmark, the S&P 500 Total Return Index, which posted a 1-year return of 37.62%. Despite this, AWSHX’s long-term performance remains strong, with a 10-year annualized return of 11.64% and an inception return of 11.01%. These figures highlight the fund’s ability to deliver consistent returns over the long term, making it an attractive option for investors looking for steady growth. The fund’s performance is supported by its strategic allocation to sectors like technology and healthcare, which have been key drivers of growth.
Sector Allocation: A Strategic Blend for Stability and Growth
AWSHX’s sector allocation is a testament to its strategic approach to investing. With a significant 21.91% allocation to technology and 15.56% to healthcare, the fund is well-positioned to capitalize on growth opportunities in these dynamic sectors. Additionally, the fund maintains a balanced exposure to financials (16.91%) and industrials (10.47%), providing a diversified portfolio that can weather market fluctuations. This sector diversification not only enhances the fund’s growth potential but also mitigates risks associated with over-concentration in any single sector. Investors can benefit from this balanced approach, which aims to deliver both stability and growth.
Top Holdings: Anchoring on Established Leaders
The top holdings of AWSHX reflect its focus on established market leaders. With significant investments in companies like Broadcom Inc (6.27%), Microsoft Corp (5.55%), and UnitedHealth Group Inc (3.00%), the fund is anchored by firms with strong earnings and dividend records. These companies are known for their resilience and ability to generate consistent returns, aligning with the fund’s objective of growth and income. The inclusion of other blue-chip stocks such as Apple Inc and JPMorgan Chase & Co further strengthens the fund’s portfolio, providing a solid foundation for long-term capital appreciation.
Risk Metrics: Understanding the Volatility Landscape
AWSHX’s risk metrics provide insight into its volatility and performance relative to the market. With a beta of 0.82, the fund exhibits lower volatility compared to the S&P 500, suggesting a more stable investment option. However, the negative alpha of -6.74% and Sharpe ratio of -0.64 indicate potential underperformance relative to its benchmark. The fund’s R-squared value of 91.79% shows a high correlation with the S&P 500, which may limit diversification benefits. Despite these challenges, the fund’s downside risk is relatively low, with a max drawdown of -5.7%, indicating resilience during market downturns.
Competitive Comparison: Standing Out Among Peers
When compared to similar funds, AWSHX holds its ground with a competitive expense ratio of 0.56% and a yield of 1.25%. While its 1-year return of 30.92% is comparable to peers like DWS Equity Sector Strategy-A (30.91%) and Sit Dividend Growth-I (30.15%), AWSHX’s focus on established NYSE stocks provides a unique value proposition. The fund’s strategic sector allocation and top holdings differentiate it from competitors, offering a blend of growth and income that appeals to a wide range of investors. This competitive edge makes AWSHX a compelling choice for those seeking a balanced investment approach.
Investor Suitability: Aligning with Growth and Income Objectives
AWSHX is particularly well-suited for investors seeking a combination of growth and income. Its focus on large-cap stocks with strong earnings and dividend records aligns with the objectives of those looking for stable, long-term capital appreciation. The fund’s strategic sector allocation and top holdings provide exposure to high-growth industries while maintaining a diversified portfolio. However, investors should be aware of the fund’s potential underperformance relative to its benchmark, as indicated by its negative alpha and Sharpe ratio. Overall, AWSHX offers a balanced investment option for those seeking to enhance their portfolio with established, high-quality stocks.
Conclusion: A Balanced Approach to Growth and Income
In conclusion, the American Funds Washington Mutual-A (AWSHX) stands out as a balanced mutual fund that offers both growth and income through its strategic investment in established NYSE stocks. With a competitive expense ratio and a diversified sector allocation, the fund provides a stable investment option for those seeking long-term capital appreciation. While its performance may lag slightly behind its benchmark, AWSHX’s focus on high-quality, dividend-paying stocks makes it an attractive choice for investors looking to balance risk and reward. This fund is particularly suitable for those who value stability and consistent returns in their investment portfolio.
Similar Securities
AIVSX: American Funds Investment Co of Amer-A | Growth and Income in Large Cap Equities
AIVSX offers a balanced approach to growth and income with a competitive 0.58% expense ratio and strong large-cap focus.
PNRAX: Putnam Research-A | Growth-Focused Large Cap Fund
PNRAX excels with a 38.98% 1-year return, driven by top tech holdings and a 1.01% expense ratio, ideal for growth-focused investors.
SHRAX: ClearBridge Aggressive Growth-A | Aggressive Growth Strategy
SHRAX offers aggressive growth with a tech-heavy portfolio, outperforming peers in 1-year returns but with higher risk metrics.
POGAX: Putnam Growth Opportunities-A | Capital Appreciation with Top U.S. Stocks
POGAX offers high growth potential with a 41.21% 1-year return, focusing on top U.S. tech stocks. Competitive in large-cap growth with a 0.92% expense ratio.
SBLGX: ClearBridge LargeCap Growth-A | High-Return Large Cap Growth Fund
SBLGX offers high returns with a focus on large-cap tech stocks, outperforming its benchmark with a 43.11% 1-year return.
Futher Reading
https://finance.yahoo.com/quote/AWSHX/”>Yahoo: American Funds Washington Mutual-A
https://ftcloud.fasttrack.net/web/chart/AWSHX
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