Why American Funds American Balanced Fund Remains a Solid Choice

Key Morningstar Metrics for American Funds American Balanced

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

Despite an unusual spate of manager turnover, American Funds American Balanced ABALX is steered by an able group employing a disciplined approach.

Manager changes have become the norm here in recent years. As part of a broader reorganization of the equity team at Capital Group (this strategy’s advisor), equity portfolio managers Mark Casey and Irfan Furniturewala left the strategy on Jan. 1, 2026—the latter had been a named manager for less than three years. (The two continue to manage other strategies at Capital.) In 2024, equity manager Jeff Lager (the fund’s principal investment officer at the time) retired, and another, Anne-Marie Peterson, left to focus on other funds. Three other managers have departed since late 2020.

Yet, despite this personnel turnover, the 11-person crew managing this strategy remains highly qualified, even if it has, on average, spent less time on board than some previous cohorts. Balanced manager Hilda Applbaum and equity manager Alan Berro have served here for 20 years, Alan Wilson has managed an equity sleeve for a decade, and current principal investment officer Paul Benjamin spent years as the coordinator of the analyst-run research portfolio before being named a manager in 2014. The latest addition to the strategy has highly relevant experience as well. Equity manager Anirudh Samsi joined on Jan. 1, 2026, and is well-versed in the dividend-focused approach to stocks that is employed here; he’s served as an equity manager on American Funds Income Fund of America AMECX since 2015. The fixed-income effort is also appealing, as that team’s process became more disciplined over the years and the firm brought in proven personnel to bolster the group.

The equity managers are backed by more than 50 analysts with plenty of experience pursuing a growth-and-income mandate such as this one; the managers aim to at least match the yield of the S&P 500. The fixed-income team aims to offset equity volatility while adding value through security selection. Asset-allocation moves, directed by Benjamin after discussions with the rest of the team, have been modest but generally additive.

American Funds American Balanced: Performance Highlights

This strategy has been firing on all cylinders.

Over the trailing three-, five-, 10-, and 15-year periods through February 2026, the fund surpassed most of its moderate-allocation Morningstar Category peers as well as the category benchmark, the Morningstar US Moderate Target Allocation Index, on total returns as well as Sharpe ratio (a measure of risk-adjusted performance). The fund also surpassed its internal benchmark (60% S&P 500/40% Aggregate Index) over those periods.

Security selection has been the primary driver of outperformance versus peers and the benchmark. A heavy stake in mega-cap stocks in recent years has provided a strong tailwind in most periods. But even as market leadership shifted from growth stocks to value over the course of 2023-25, the strategy outperformed in all three calendar years. Management makes asset-allocation moves, typically modest in scope, that have often proved timely. The conservative fixed-income portfolio, which eschews high-yield debt, has typically provided ballast in declines. And although credit risk provided a big boost in 2022’s atypical downturn, the strategy held up better than peers and the benchmark through adept stock and bond selection.