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2017 Midyear Outlook

For the first time in years, the world’s major economies all appear to be on the road to recovery. This shift is creating opportunities for investors to rebalance their portfolios to take advantage of new opportunities overseas as well as in the bond market.

Download our 2017 Midyear Outlook for an in-depth look at how economic momentum is building across the globe amid political uncertainty. Our research pinpoints unique opportunities in non-U.S. markets as the macroeconomic backdrop is positive for global growth. There are also ways to position fixed income portfolios as interest rates are likely to remain lower for longer in the U.S.

Highlighted below are some of the key insights from our Midyear Outlook. 

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The Long View: The Changing Face of the Global Consumer

Consumer spending, long a driver of the global economy, is undergoing sweeping change. Whether it’s housing for millennials or health care for baby boomers, a significant shift in the way people spend money is underway in both advanced economies and the developing world.

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No doubt, the world’s markets spent the first half of 2016 on rocky ground. Investors have been confronted with the British vote to leave the European Union (“Brexit”), a “growth scare” in the U.S., the economic deceleration in China, and the introduction of negative interest rates in some markets. Nevertheless, the global economy is expected to remain on a path to growth — albeit very slow growth.

Looking ahead to the second half of 2016, market volatility is likely to remain elevated. What are the longer term implications of the Brexit vote? Can the resilient U.S. economy continue on its growth path? Will Chinese consumption remain healthy as the world’s second-largest economy continues to slow? Potential opportunity will likely arise for disciplined investors who can look past the near-term macroeconomic clouds toward individual companies with bright prospects.

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INVESTMENT INSIGHTS  |  June 2016  |  FEATURING Robert H. Neithart

Uncovering Value in Emerging Markets Bonds Amid Political Change and Uneven Growth

Emerging markets bonds have notched big gains in 2016, despite political turmoil and economic setbacks. Though it is difficult to definitively say that the market has turned for the better, portfolio manager Rob Neithart says there are good reasons for investors to feel positive. The yield advantage of emerging markets over developed markets is hard to ignore, and in some cases valuations are as attractive as they’ve been in years.

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INVESTMENT INSIGHTS  |  March 2016  |  FEATURING Stephen Green & Andrew H. Dougherty

China Mired in Slow Growth, Major FX Move Unlikely

As the world’s second-largest economy, China is at an important turning point. China’s leadership has pledged to put the economy on the right track and be less opaque about its currency moves. Economist Stephen Green and China affairs specialist Andrew Dougherty discuss:

  • The outlook for China’s economy and why a soft landing is more likely
  • The case against China pulling the trigger on a big, one-time devaluation of its currency
  • Whether China’s leadership can manage the political and social implications of deep structural reforms
  • Pockets of strength in the Chinese economy during this transition to consumption-led growth 

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March 2016
 |  FEATURING Matt Miller & Andrew H. Dougherty

Expect a Slow-Growth Transition Period for China

China affairs specialist Andrew Dougherty shares his growth outlook for China as it makes the transition from an investment-based economy to a service-based economy.

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January 2016
 |  FEATURING Joanna F. Jonsson

China, Volatility and Why This Is Not 2008

Portfolio manager Jody Jonsson discusses the role of China’s decelerating GDP and overvalued currency in the latest market volatility.

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January 2016
 |  FEATURING Kevin G. Clifford & John H. Smet

Fixed-Income Themes for ’16: Inflation, Quality

American Funds portfolio manager John Smet discusses areas of opportunity he sees for fixed-income investors looking ahead into 2016.

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January 2016
 |  FEATURING Kevin G. Clifford , Timothy D. Armour & Robert W. Lovelace

Investment Themes to Watch in 2016

American Funds portfolio managers Tim Armour and Rob Lovelace discuss investment opportunities in the emerging markets, oil and commodities, health care and pharmaceuticals, and the internet.

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January 2016
 |  FEATURING Kevin G. Clifford & Robert W. Lovelace

U.S., China Trade Places as Global Growth Engine

Portfolio manager Rob Lovelace offers his perspective on recovery and growth in China, the U.S., Japan, Europe and the emerging markets.

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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. 

Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness. If agency ratings differ, the security will be considered to have received the  of those ratings, consistent with the fund's investment policies. Securities in the Unrated category have not been rated by a rating agency; however, the investment adviser performs its own credit analysis and assigns comparable ratings that are used for compliance with fund investment policies. 

Bond ratings, which typically range from AAA/Aaa (highest) to D (lowest), are assigned by credit rating agencies such as Standard & Poor's, Moody's and/or Fitch, as an indication of an issuer's creditworthiness.

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. 

Certain market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. 

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and not to be comprehensive or to provide advice.