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Taxable Bonds

INVESTMENT INSIGHTS  |  January 2017  |  FEATURING Joyce E. Gordon

Finding Income in a Low-Rate World

Historically low interest rates have put a damper on income for many investors. CDs, Treasury notes and other guaranteed investments, while once a source of modest income, have lagged over the years. For example, the typical five-year CD interest rate is 0.82%, and the five-year daily treasury yield curve rate is 1.83%.* That means many investors have had to adjust their expectations or look to other, more risky, investments to help them pursue income.

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INVESTMENT INSIGHTS  |  September 2016  |  FEATURING Margaret H. Steinbach , Mike Gitlin & David A. Hoag

Fixed Income 3.0: How to Approach Bond Portfolios in a Post-Post-Crisis World

It has been eight years since the global financial crisis, but in many ways, the impact is still being felt today — in lackluster economic growth around the world, in negative interest rates in several major economies, and in muted inflationary pressures. In order to build sustainable bond portfolios in today’s environment, it is important to understand how we got here, the structural changes in the global  economy and financial markets that have resulted from the crisis, and the challenges ahead that still need to be addressed.

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INVESTMENT INSIGHTS  |  September 2016  |  FEATURING Margaret H. Steinbach , Mike Gitlin & David A. Hoag

Is Aggressive Central Bank Intervention Working?

Quantitative Easing on Turbocharge in Major Economies

In response to the global financial crisis and the muted growth that persists years later, central banks across the globe have aggressively expanded their balance sheets using a range of both traditional and unconventional policy tools. As of the end of June, the combined balance sheets of the U.S. Federal Reserve, European Central Bank and Bank of  Japan totaled over $12.1 trillion — a  283% increase since June 2007. Never before have the balance sheets of the central banks of these major economies  been so inflated.

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INVESTMENT INSIGHTS  |  September 2016  |  FEATURING Margaret H. Steinbach , Mike Gitlin & David A. Hoag

How to Invest in the Post-Post-Crisis

U.S. Economy: Not an Environment for Aggressive Monetary Policy Tightening

It’s been said, and feared, for years that U.S. interest rates will quickly rise once the Federal Reserve starts to reverse course, resulting in declines in the prices of fixed income securities. Since the infamous “Taper Tantrum” in mid-2013, the Federal Reserve has been carefully trying to step away from the unprecedented easy money policy it has employed since the financial crisis. Yet, the power of the U.S. to  act in isolation has diminished over the past decade.

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INVESTMENT INSIGHTS  |  September 2016  |  FEATURING John R. Queen , Gregory D. Johnson & Hilda L. Applbaum

American Balanced Fund: Balancing Risk and Reward in Volatile Markets

In recent years, many investors have turned to balanced funds to navigate a challenging market environment. Although the U.S. remains a bright spot in global financial markets, low bond yields have made income generation more difficult while equities on the whole appear fully valued following a sharp run-up since the financial crisis. Managers of balanced funds can more nimbly explore evolving opportunity sets using both allocation and security selection. In this Q&A, three portfolio managers with American Balanced Fund® discuss their investment approach in the current environment

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INVESTMENT INSIGHTS  |  Wed Jun 22 03:11:00 PDT 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  | 
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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INVESTMENT INSIGHTS  | 
December 2015
 |  FEATURING Kevin G. Clifford & John H. Smet

Fed Set to Hike Rates but Stay Lower for Longer

Fixed-income portfolio manager John Smet discusses the economic conditions underlying the Fed’s anticipated interest rate hike and offers a likely trajectory for future increases.

Watch Video (2:34)

INVESTMENT INSIGHTS  | 
November 2015
 |  FEATURING Wesley K.-S. Phoa

What a Rate Hike Can Mean for Long-Term Yields

A portfolio manager discusses why interest rates have remained low in the U.S. and what to expect from yields when rates do rise.

Watch Video (2:08)

INVESTMENT INSIGHTS  | 
November 2015
 |  FEATURING Wesley K.-S. Phoa

Why Own Bonds in a Rising Rate Environment?

A portfolio manager discusses reasons to own bonds in a rising rate environment in the context of investor objective.

Watch Video (1:36)


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. 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 highest 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. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. 

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. 

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. 

Expense ratios are as of the most recent prospectus. 

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.