Why We Highly Rate American Funds Washington Mutual

Key Morningstar Metrics for American Funds Washington Mutual

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

Veteran leadership and a proven approach make American Funds Washington Mutual RWMGX a worthy option.

The fund remains in strong hands. While veteran managers Jeffrey Lager and Alan Wilson stepped off this fund in 2024, it is well-supported. Alan Berro, who heads the eight-manager team, started in the industry in the 1980s and has run money here since the late 1990s. The firm disclosed Aline Avzaradel as a named manager in early 2024 to help ease the departures. All eight managers each have more than 20 years of investment experience. Behind the management team sits a deep and talented team of more than 100 analysts.

The time-tested approach here centers on dividends and the ability to pay them, but it has some flexibility to invest in non-dividend-payers. It prioritizes US investment-grade companies with a long history of paying dividends, but leadership has wisely updated the guidelines in response to seismic market shifts over the years. For example, during times of heightened stress like the pandemic, the fund’s board granted temporary approval for managers to continue holding stocks like General Motors GM, which suspended its dividend in the wake of the pandemic. The managers can also allocate a small portion of the fund’s assets to non-dividend-payers that combine ongoing superior profitability with modest leverage relative to industry peers, such as Cadence Design Services CDNS.

This fund’s focus on dividends has led to a fairly conservative portfolio that has served risk-averse investors well. The fund has gotten ahead by offering a less volatile portfolio that consistently holds up well in downturns. Since Berro’s 1997 start, the fund has held up better than the S&P 500 in all but four market declines of 10% or more. On the other hand, it has typically lagged in more growth-fueled rallies. For example, the fund trailed the index in 2023 and 2024 and landed in the bottom half of the peer group in both years, in part thanks to smaller stakes in technology companies with small or no dividend yields, such as Nvidia NVDA During the volatile first six months of 2025, the fund’s quality-oriented focus landed it in the top decile of peers.

American Funds Washington Mutual: Performance Highlights

The fund’s conservative posture and income orientation have performed well since the longest-tenured manager Alan Berro’s July 1997 start. From that time through June 2025, the R6 share class’ 9.3% annualized gain beat the fund’s current large-blend and former large-value category peer norms by 1.6 and 1.9 percentage points, respectively. It narrowly edged the S&P 500 during that period by 13 basis points, too. Thanks to below-average volatility, as measured by standard deviation, its risk-adjusted results were superior to the index and category peers.

The fund has succeeded by losing less in down markets. For example, in 2022, the fund lost 8.5% versus the index’s 18.1% loss, and it landed in the category’s top decile. The fund had strong picks across the board, but industrials firms such as Northrop Grumman NOC and semiconductor giant Broadcom AVGO led the charge. The fund has been consistent, too. It held up better than the index in all but four market pullbacks, as measured by a decline of 10% or more, since Berro‘s 1997 start. In 2025’s first half, when valuation came into focus, the fund outperformed the index and typical peer.

The fund doesn’t typically keep up with the index in more growth-fueled rallies. For example, the fund trailed the index in 2023 and 2024 and was in the bottom half of the peer group both years, in part owing to smaller stakes in tech companies with small or no dividend yields, such as Nvidia.