14 important things you should know about American Funds MFAAX mutual fund

Updated: June 29, 2020
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Before we start: if you’re looking for MFAAX “stock” price, you can quickly find it out by visiting Finny and typing "MFAAX quote". If you’re looking for a quick scoop on MFAAX "stock" (price chart, key stats, buy or sell analysis and holdings), go to Finny and look for "MFAAX". You’ll get all this info in one place.

Are you looking to buy or sell MFAAX? Or perhaps you’re looking for MFAAX fact sheet, and learn about its alternatives? If so, you came to the right place.

In this MFAAX mutual fund review, we’ll address key questions our readers have been asking us about this fund, above and beyond what you can find in its prospectus, and on Morningstar or Yahoo Finance.

Here is what you’ll be able to find in this review:

  • Fact Sheet: MFAAX performance, returns, expense ratio, holdings and dividend yield;
  • Analysis: MFAAX buy or sell; the pros and cons of investing in MFAAX mutual fund;
  • Alternatives: other ETFs and mutual funds you should consider as alternatives to MFAAX.

And here is the list of questions we’ll answer:

  1. Describe American Funds Mortgage Fund; Class A Shares (MFAAX).
  2. What are MFAAX holdings?
  3. What is MFAAX performance? What are MFAAX historical returns?
  4. How many up and down years did MFAAX have historically?
  5. What is MFAAX dividend yield?
  6. What is MFAAX minimum initial investment amount?
  7. What is MFAAX expense ratio?
  8. Does MFAAX have any sales loads or 12b-1 distribution expenses?
  9. What is MFAAX tax efficiency (tax-cost ratio)?
  10. What is MFAAX beta? How would you assess MFAAX risk?
  11. What is MFAAX Sharpe ratio?
  12. What is MFAAX Finny Score? MFAAX buy or sell?
  13. What are the pros of investing in MFAAX? What are MFAAX buy reasons?
  14. What are the cons of investing in MFAAX? What are MFAAX sell reasons?

So let’s start. Scroll down to the question that interests you the most.

Fact Sheet

1. Describe American Funds Mortgage Fund; Class A Shares (MFAAX).

The Fund seeks current income and preservation of capital. At least 80% of the funds assets will be invested in mortgage-related securities, including contracts for future delivery of such securities (such as to be announced contracts and mortgage dollar rolls) and other securities collateralized by mortgage loans.

2. What are MFAAX top holdings?

MFAAX has 0 stock holdings and 427 bond holdings.

The top 8 holdings represent 22.65% of total assets. Here are the top holdings:

Name Symbol % Assets
Federal National Mortgage Association 3.5% N/A 6.46%
Federal National Mortgage Association 2% N/A 4.98%
Federal National Mortgage Association 4.5% N/A 2.59%
Federal National Mortgage Association 3% N/A 1.85%
Federal Home Loan Mortgage Corporation 3% N/A 1.84%
Federal Home Loan Mortgage Corporation 3.5% N/A 1.70%
Federal Home Loan Mortgage Corporation N/A 1.62%
Government National Mortgage Association 4% N/A 1.61%

3. What is MFAAX performance? What are MFAAX historical returns?

MFAAX has generated the following returns:

  • 1-month return is -0.14%;
  • 3-month return is 4.12%;
  • 1-year return is 7.82%;
  • 3-year return is 3.55%;
  • 5-year return is 2.91%.

4. How many up and down years did MFAAX have historically?

In the last 10 years, MFAAX had 9 up years and 1 down year.

5. What is MFAAX dividend yield?

MFAAX yield is 2.17%.

6. What is MFAAX minimum initial investment amount?

MFAAX minimum initial investment amount is $1.00K.

7. What is MFAAX expense ratio?

MFAAX expense ratio is 0.71%. The expense ratio of a fund is the total percentage of fund assets used for administrative, management, and all other expenses.

8. Does MFAAX have any sales loads or 12b-1 distribution expenses?

MFAAX 12b-1 distribution fee is 0.25. MFAAX front-end sales load is 3.75. MFAAX back-end sales load is 0.

9. What is MFAAX tax efficiency (tax-cost ratio)?

  • 1-year ax cost ratio is 1.12%;
  • 3-year ax cost ratio is 0.86%.

10. What is MFAAX beta? How would you assess MFAAX risk?

  • 3-year beta is 0.57;
  • 5-year beta is 0.55.

11. What is MFAAX Sharpe ratio?

  • 3-year Sharpe ratio is 0.66;
  • 5-year Sharpe ratio is 0.71.

Analysis

12. What is MFAAX Finny Score? MFAAX buy or sell?

MFAAX Finny Score is 43. Our quantitative analysis shows 3 reasons to buy MFAAX and 4 reasons to sell it, resulting in the Finny Score of 43.

13. What are the pros of investing in MFAAX? What are MFAAX buy reasons?

The following are MFAAX strengths from our perspective:

  • MFAAX 5-year return is 2.91%, which is in line with the 5-year return of the benchmark index (Bloomberg Barclays US MBS TR USD), 3.15%.
  • MFAAX 3-year Beta is 0.57, which is inversely correlated with the index (BBgBarc US Agg Bond TR USD). The could be good if you're trying to hedge your portfolio.
  • MFAAX 5-year Beta is 0.55, which is inversely correlated with the index (BBgBarc US Agg Bond TR USD). The could be good if you're trying to hedge your portfolio.

14. What are the cons of investing in MFAAX? What are MFAAX negatives?

The following are MFAAX weaknesses from our perspective:

  • MFAAX net assets are $202.70 million. This fund is not a popular choice with retail investors.
  • MFAAX 3-year return is 3.55%, which is lower than the 3-year return of the benchmark index (Bloomberg Barclays US MBS TR USD), 4.17%.
  • Warning: this fund has a 12b1 and front-end sales fee. The maximum 12b1 fee is 0.25%, while the maximum front-end sales load is 3.75%. A 12b-1 fee is an annual marketing or distribution fee on a mutual fund. Front-end sales load, also known as sales charge, is a fee paid when mutual funds shares are purchased. Those fees are subtracted from your total investable assets.
  • MFAAX expense ratio is 0.71%, which is not negligible. Is the fund expensive to you, and does it align to your investment strategy?
In the MFAAX review, we covered MFAAX key stats (return, performance, yield, expense ratio, and holdings), buy and sell analysis, and alternative investments. If this review was helpful to you, feel free to check out other mutual fund and ETF reviews.
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