We Seek to Provide Superior Risk-Adjusted Results | American Funds

The Capital Advantage

APRIL 2018

We Seek to Provide Superior Risk-Adjusted Results

Capital Group’s Equity-Focused American Funds Have Delivered Superior Returns and a Smoother Ride for Investors

Many investors assume that selective investing involves much greater risk than investing in passive investments, but our equity-focused funds are managed with a focus on mitigating risk. We believe it is this focus that has enabled most of our funds to reduce losses during down markets, leaving investors in a better position to recover when the market rebounds.

Funds that track the index are designed by default to capture 100% of the market’s swings, whether up or down. As shown here, our equity-focused American Funds have often captured relatively less of the market’s volatility while often producing better outcomes for investors over the long term.

We analyzed the risk and return characteristics for the 14 funds in existence for all monthly rolling 10-year periods during the 20 years ended December 31. On average, all but one of the 14 funds generated superior returns over their respective benchmarks, and eight funds did so while achieving lower average volatility.


Average of Rolling Monthly 10-Year Periods for the 20 Years Ended December 31, 2017

Average Annual Total Return

Returns for all charts are average annual total returns for Class F-2 shares for rolling monthly 10-year periods for the 20 years ended 12/31/17 and are at net asset value. Volatility measured by annualized standard deviation (based on monthly returns) over the 10-year period, calculated at net asset value by Lipper.

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*Capture Ratio reflects the annualized product of fund versus index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture).

MSCI ACWI Index and MSCI ACWI ex USA Index benchmarks were launched in June 2001. Capture ratios for their respective funds - WGI, NPF, EUPAC, and CIB - are for the period 6/1/2001 - 12/31/2017.


Standard & Poor’s 500 Composite Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. The S&P 500 Composite Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and have been licensed for use by Capital Group. Copyright © 2018 S&P Dow Jones Indices, LLC, a division of S&P Global, and or/its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC.

MSCI All Country World Index (ACWI) measures stock markets in more than 40 developed and developing countries. MSCI ACWI ex USA measures the same markets except for the U.S., while MSCI ACWI Small Cap measures small capitalization of companies in all the markets. Results for the MSCI indices reflect net dividends.

Bloomberg® is a trademark of Bloomberg Finance L.P. (collectively with its affiliates, “Bloomberg”). Barclays® is a trademark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Neither Bloomberg nor Barclays approves or endorses this material, guarantees the accuracy or completeness of any information herein and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

Class F-2 shares were first offered on August 1, 2008. Class F-2 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for estimated annual expenses. View dates of first sale and specific expense adjustment information.


Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. View fund expense ratios and returns. 

Returns shown at net asset value (NAV) have all distributions reinvested.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. 

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. 

Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. 

Securities offered through American Funds Distributors, Inc.

Regular investing does not ensure a profit or protect against loss. Investors should consider their willingness to keep investing when share prices are declining.