NEWFX vs. ABALX

Last updated Jun 24, 2026

NEWFX (American Funds New World Fund) and ABALX (American Funds American Balanced Fund Class A) are both mutual funds - NEWFX is a Emerging Markets Diversified fund managed by American Funds, while ABALX is a Diversified Portfolio fund actively managed by American Funds. Over the past 10 years, NEWFX returned 11.48%/yr vs 10.20%/yr for ABALX. A 0.75 correlation means they provide meaningful diversification when combined. NEWFX charges 0.96%/yr vs 0.56%/yr for ABALX.

Performance

NEWFX vs. ABALX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in American Funds New World Fund (NEWFX) and American Funds American Balanced Fund Class A (ABALX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, NEWFX achieves a 18.61% return, which is significantly higher than ABALX's 9.39% return. Over the past 10 years, NEWFX has outperformed ABALX with an annualized return of 11.48%, while ABALX has yielded a comparatively lower 10.20% annualized return.

NEWFX

• 1D: 0.53%
• 1M: 5.56%
• YTD: 18.61%
• 6M: 18.69%
• 1Y: 36.61%
• 3Y*: 19.46%
• 5Y*: 6.93%
• 10Y*: 11.48%

ABALX

• 1D: -0.34%
• 1M: 1.42%
• YTD: 9.39%
• 6M: 9.30%
• 1Y: 22.74%
• 3Y*: 17.01%
• 5Y*: 9.60%
• 10Y*: 10.20%

*Multi-year figures are annualized to reflect compound growth (CAGR)

NEWFX vs. ABALX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
NEWFX American Funds New World Fund	18.61%	28.16%	6.45%	15.75%	-22.08%	4.69%	24.79%	27.51%	-12.32%	32.56%
ABALX American Funds American Balanced Fund Class A	9.39%	18.45%	14.63%	13.65%	-12.13%	15.75%	10.85%	18.60%	-3.35%	14.69%

Correlation

The correlation between NEWFX and ABALX is 0.82, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.82
Correlation (3Y) Calculated over the trailing 3-year period	0.80
Correlation (5Y) Calculated over the trailing 5-year period	0.82
Correlation (10Y) Calculated over the trailing 10-year period	0.81
Correlation (All Time) Calculated using the full available price history since Jun 17, 1999	0.75

The correlation between NEWFX and ABALX has been stable across timeframes, ranging from 0.75 to 0.82 - a consistent structural relationship.

Return for Risk

NEWFX vs. ABALX — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

NEWFX

NEWFX Risk / Return Rank: 68
NEWFX Sharpe Ratio Rank: 74
NEWFX Sortino Ratio Rank: 67
NEWFX Omega Ratio Rank: 75
NEWFX Calmar Ratio Rank: 61
NEWFX Martin Ratio Rank: 61

ABALX

ABALX Risk / Return Rank: 82
ABALX Sharpe Ratio Rank: 85
ABALX Sortino Ratio Rank: 82
ABALX Omega Ratio Rank: 80
ABALX Calmar Ratio Rank: 78
ABALX Martin Ratio Rank: 85

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

NEWFX vs. ABALX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for American Funds New World Fund (NEWFX) and American Funds American Balanced Fund Class A (ABALX). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	NEWFX	ABALX	Difference
Sharpe ratio: Return per unit of total volatility	2.31	2.56	-0.25
Sortino ratio: Return per unit of downside risk	3.11	3.56	-0.45
Omega ratio: Gain probability vs. loss probability	1.44	1.48	-0.04
Calmar ratio: Return relative to maximum drawdown	2.86	3.35	-0.48
Martin ratio: Return relative to average drawdown	11.44	14.81	-3.37

NEWFX vs. ABALX - Sharpe Ratio Comparison

The current NEWFX Sharpe Ratio is 2.31, which is comparable to the ABALX Sharpe Ratio of 2.56. The chart below compares the historical Sharpe Ratios of NEWFX and ABALX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

NEWFX vs. ABALX - Drawdown Comparison

The maximum NEWFX drawdown since its inception was -56.71%, which is greater than ABALX's maximum drawdown of -40.20%. Use the drawdown chart below to compare losses from any high point for NEWFX and ABALX.

Drawdown Indicators

	NEWFX	ABALX	Difference
Max Drawdown Largest peak-to-trough decline	-56.71%	-40.20%	-16.51%
Max Drawdown (1Y) Largest decline over 1 year	-13.03%	-7.03%	-6.00%
Max Drawdown (3Y) Largest decline over 3 years	-15.18%	-10.68%	-4.50%
Max Drawdown (5Y) Largest decline over 5 years	-33.68%	-18.76%	-14.92%
Max Drawdown (10Y) Largest decline over 10 years	-33.68%	-22.34%	-11.34%
Current Drawdown Current decline from peak	0.00%	-0.53%	+0.53%
Average Drawdown Average peak-to-trough decline	-11.72%	-3.85%	-7.87%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.25%	1.59%	+1.66%

Volatility

NEWFX vs. ABALX - Volatility Comparison

American Funds New World Fund (NEWFX) has a higher volatility of 7.60% compared to American Funds American Balanced Fund Class A (ABALX) at 3.41%. This indicates that NEWFX's price experiences larger fluctuations and is considered to be riskier than ABALX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	NEWFX	ABALX	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.60%	3.41%	+4.19%
Volatility (6M) Calculated over the trailing 6-month period	14.28%	7.31%	+6.97%
Volatility (1Y) Calculated over the trailing 1-year period	16.22%	9.21%	+7.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.72%	10.57%	+5.15%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.26%	10.72%	+5.54%

NEWFX vs. ABALX - Expense Ratio Comparison

NEWFX has a 0.96% expense ratio, which is higher than ABALX's 0.56% expense ratio.

Dividends

NEWFX vs. ABALX - Dividend Comparison

NEWFX's dividend yield for the trailing twelve months is around 4.81%, less than ABALX's 7.12% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ABALX American Funds American Balanced Fund Class A	7.12%	8.27%	6.87%	2.05%	2.30%	4.30%	4.35%	3.49%	5.49%	4.72%	4.24%	5.60%
NEWFX American Funds New World Fund	4.81%	5.71%	3.66%	2.46%	0.89%	6.89%	0.10%	3.65%	2.26%	1.90%	0.92%	0.60%

Frequently Asked Questions

Can I hold both NEWFX and ABALX in my portfolio?

NEWFX and ABALX have a correlation of 0.82, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, NEWFX or ABALX?

NEWFX has higher volatility (7.60%) compared to ABALX (3.41%). In terms of maximum drawdown, NEWFX dropped -56.71% vs ABALX's -40.20%.

Which has better risk-adjusted returns?

ABALX currently has the higher Sharpe Ratio (2.56 vs 2.31), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.