Fixed Income at Capital Group | American Funds

Fixed Income at Capital Group

Capital Group, provider of the American Funds, has been committed to investing in fixed income assets since 1973. We believe that high-conviction investing and diverse perspectives can produce better results.

 

$272 BILLION

American Funds has $272 billion in fixed income assets under management.1 We pursue durable outcomes for investors through our focus on long-term results and downside protection.


Fixed Income Funds

Our robust family of bond funds can help investors pursue a variety of goals. They can be used as a portfolio anchor that can help dampen equity volatility, seek enhanced total return/income or establish a dedicated asset class exposure.


Our Fixed Income Advantage

We provide value to investors through our distinctive approach, an aligned focus on client outcomes and strong risk-adjusted results.

Superior Outcomes

Our bond funds seek to reduce the impact of market volatility and help investors achieve diversification through attention to the correlation between bonds and equities. They seek to accomplish these goals while also delivering strong total returns and risk-adjusted returns compared to their peers.

Bond Funds That Behave Like Bond Funds
Low Correlation to the S&P 500 Composite Index — 3-Year Period2

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Source: Morningstar®. Data as of December 31, 2016. Based on results of Class F-2 shares. 

Learn How to Implement Our Fixed Income Funds in a Portfolio

Our Implementation Guide explains characteristics of our bond funds and how they aim to play four central roles that fixed income should serve in a portfolio.


A Disciplined Process Guided by Conviction

At Capital Group, research guides our investment decisions. Our unique system empowers analysts to manage money, enhancing their accountability and helping them to identify better opportunities. They work with portfolio managers and collaborate regularly with their equity colleagues through a team approach that results in high-conviction ideas gaining prominence in our portfolios.

Shared Experience Across Equity and Fixed Income Can Lead to Better Decisions
Example: Air Transportation

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Sector
Review:

Airlines

Tara Torrens Fixed Income
R.D. Kern Equity

Insights:

Examine how airlines are positioned to take advantage of changes in global air travel.

Sector
Review:

Suppliers

Mital Kotecha Fixed Income
Justin Toner Equity

Insights:

Analyze demand for more fuel-efficient planes as well as the capacity required for routes with the highest growth potential.

Sector
Review:

Munis

Courtney Koester Municipal Bonds

Insights:

Determine which airports are likely to benefit from an increase in traffic and which will need to issue debt to improve facilities and meet growing demand.

Sector
Review:

Macro

Darrell R. Spence U.S.
Jens Søndergaard Europe

Insights:

Forecast global growth trends that may affect demand for air travel.

Sector
Review:

Energy

Damien McCann Fixed Income
Darren Peers Equity

Insights:

Assess the direction and magnitude of changes in fuel prices and how they might affect profitability, costs and consumer demand, as well as the need for new, more fuel-efficient airplanes.

Outcome

Practical investment ideas executed by analysts and portfolio managers across:

Corporate Debt

  • EETCs
    (enhanced equipment trust certificates)
  • Traditional corporate bonds

Municipal Bonds

  • Airport bonds

Equity

  • Airlines
  • Suppliers







































A Robust, Experienced Team of Dedicated Fixed Income Professionals6

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Commitment to Investor Success


American Funds is the only top 10 fixed income fund family with 100% of managers invested in the funds they manage.3



Manager compensation places an emphasis on long-term results over one, three, five and eight years — not assets under management.



We offer funds with low expense ratios, as reflected in American Funds’ “A” fee grade from Morningstar.


American Funds Management Fees Compared to Peer Median5

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Fixed Income Insights

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Assets under management as of March 31, 2017.

Three-year correlation measured against peer median using monthly return data and standard compounding method. Tax-exempt funds not included. Categorically they are not correlated with equity and have shown less than 0.1% correlation.

Source: Capital Group, using data obtained from Morningstar. Top 10 largest fund family based on fixed income AUM.

Source: “2015 Morningstar U.S. Mutual Fund Industry Stewardship Survey,” June 26, 2015. An A grade means that the average fee percentile of the firm’s funds (vs. similar peers) fell into the lowest quintile of all firms.

American Funds represents fixed income funds only, in the order of highest industry median fees to lowest. Fund data as of each fund’s latest prospectus information available as of December 31, 2016. Industry median source: Morningstar, which reflects the latest information available as of December 31, 2016, for each fund’s applicable category.


6Data as of December 31, 2017. Macro Analysts are the Capital Strategy Research team (CSR).
Investment Resource Group Associates includes Investment Specialists and Investment Product Management associates.
Other Fixed Income Professionals includes portfolio and derivatives strategists, research associates and business management.
In the 4th quarter of 2016, six analysts were removed from CSR and moved to CIS (China Industry Specialist team). Investment Resource Group Associates includes Investment Specialists and Investment Product Management associates. Other Fixed Income Professionals includes portfolio and derivatives strategists, research associates and business management.


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

This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.

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

Securities offered through American Funds Distributors, Inc.

The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.