American Funds American Balanced C (BALCX) (2024)

American Funds American Balanced C Overview

American Funds American Balanced C (BALCX) is an actively managed Allocation Moderate Allocation fund. American Funds launched the fund in 2001.

The investment seeks conservation of capital, current income and long-term growth of capital and income. The fund uses a balanced approach to invest in a broad range of securities, including common stocks and investment-grade bonds. It also invests in securities issued and guaranteed by the U.S. government and by federal agencies and instrumentalities. In addition, the fund may invest a portion of its assets in common stocks, most of which have a history of paying dividends, bonds and other securities of issuers domiciled outside the United States.

About American Funds American Balanced C (BALCX)

There are 12 members of the management team with an average tenure of 8.99 years: Jeffrey Lager (2011), Pramod Atluri (2018), Mark Casey (2019), Ritchie Tuazon (2020), Jin Lee (2023), Paul Benjamin (2014), Anne-Marie Peterson (2015), Chit Purani (2023), Alan Berro (2006), John Queen (2016), Alan Wilson (2016), Hilda Applbaum (1999). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: Bloomberg US Agg Bond TR USD index with a weighting of 40% and S&P 500 TR USD index with a weighting of 60%. American Funds American Balanced C has 2757 securities in its portfolio. The top 10 holdings constitute 22.7% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

American Funds American Balanced C is part of the Allocation global asset class and is within the Allocation fund group. American Funds American Balanced C has 10.2% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 54.9%. There is 7.1% allocated to foreign stock, and 0.1% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 27.3% (24.2% domestic bond, 3.1% foreign bond and 0.0% convertible bond). American Funds American Balanced C has 7.7% of the portfolio in cash.

Assets Under Management

The fund has $8 billion in total assets, which is above the $1 billion average for the Moderate Allocation category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

American Funds American Balanced C has a trailing dividend yield of 1.6%, which is below the 2.0% category average. The fund normally distributes its dividend income quarterly and its capital gains semi-annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

BALCX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The American Funds American Balanced C expense ratio is high compared to funds in the Moderate Allocation category. American Funds American Balanced C has an expense ratio of 1.32%, which is 27% higher than its category average, making the fund expense ratio grade a D. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. American Funds American Balanced C has a portfolio turnover rate of 171%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 56% for the Moderate Allocation category.

Recently, in the month of April 2024, American Funds American Balanced C returned -3.3%, which earned it a grade of C, as the Moderate Allocation category had an average return of -3.2%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

American Funds American Balanced C Grades

Year to date, the fund has returned 2.5%, 0.5 percentage points better than the category, which translates into a grade of B. The fund has returned 11.6% over the past year (grade of B), 2.9% over the past three years (grade of B) and 6.6% per year over the past five years (grade of B) and 6.8% per year over the past 10 years (grade of B).