Q. I’m 80 years old and retired. In 1973, I purchased American Funds New Perspective “A,” which did well until recently. What’s the outlook for this fund?
J.G., Chicago
A. There are a couple of considerations about this fund for you to keep in mind.
First, it is a “world” stock fund rather than a foreign stock fund, so it has nearly half of its portfolio in U.S. stocks.
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Second, American Funds offerings are run by a group of portfolio “counselors,” with each managing a portion of assets independently. The belief is that a manager totally on his or her own will be more confident and able to defend specific choices. This system has worked well.
The $26 billion American Funds New Perspective “A” (ANWPX) declined 11 percent over the past 12 months and had a three-year annualized decline of 5.5 percent. Although that’s obviously why you’re unhappy, both results do rank within the top one-fourth of the battered world-stock-fund category.
“Because it’s a world stock fund, you’re not going to be able to choose your own U.S. and foreign exposure,” said Emily Hall, analyst with the Morningstar Inc. research firm in Chicago. “As a result, you might find you need to add a domestic fund if you want your allocation to be something more like 60 percent U.S. and 40 percent international.”
The fund must cope with its very large asset size, which means it won’t do much for the small-cap portion of your personal portfolio, Hall added.
American Funds New Perspective “A” requires a 5.75 percent “load” (sales charge) and a $250 minimum initial investment.
Q. I purchased several EE Savings Bonds in 1986. My “payable-on-death” beneficiary and I are no longer friends. I would like to name another beneficiary without cashing in the bonds. Is this possible?
–J.R., via the Internet
A. Don’t worry. EE Savings Bonds, which have been around since 1980, permit you to remove the beneficiary without obtaining the consent of that beneficiary. That wasn’t the case with the Series E bonds that preceded them.
You must fill out a Public Debt Form 4000, available at most commercial banks, on which you list the serial numbers of the bonds, their issue dates and denominations. You then list the way you wish them registered with the new beneficiary and send the form to your regional Federal Reserve Bank.
“Check Box No. 3 on the form about eliminating a living beneficiary and reissuing the bond in either single ownership form or with another person as co-owner or beneficiary,” explained Daniel Pederson, president of the Savings Bond Informer fee-based consulting service in Detroit and author of “Savings Bonds: When to Hold, When to Fold and Everything In-Between.”
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Andrew Leckey answers questions Sunday in Business and Tuesday in Your Money. Address inquiries to Andrew Leckey, P.M.B. 184, 369-B Third St., San Rafael, CA 94901-3581 or e-mail [email protected].