American Funds Insurance Series®
Variable annuities are among the fastest growing retirement investments. Despite their popularity, many people still don’t know much about them.
An annuity is a contract issued by an insurance company that can include an option to turn your assets into an income you can’t outlive.*
Annuities can be good for retirement because taxes aren’t due on variable annuity earnings until they are withdrawn. Variable annuities are designed to be retirement investments, and because of this tax-deferral feature, there is typically a 10% federal tax penalty on earnings withdrawn before age 59½.
When you buy a variable annuity contract, your money is invested in funds — similar to mutual funds — that are managed by investment professionals. Returns on your investment fluctuate as the prices of the stocks and bonds in the funds rise and fall. That’s why the annuity is called “variable.”
American Funds Insurance Series — Portfolio Series℠
The five funds in AFIS Portfolio Series are designed to help investors address specific needs such as:
The funds are aligned with two broad objectives — capital growth, or a balance of capital growth with income — to provide investors with a structured approach to pursuing specific goals as well as broad diversification.
The series includes three managed risk options that seek to manage volatility and help preserve capital during significant market declines.
Each AFIS Portfolio Series fund is a blend of individual funds within American Funds Insurance Series, which has been helping investors pursue retirement goals for more than 30 years.
The AFIS Portfolio Series funds are actively monitored by a group of senior investment professionals with varied backgrounds and approaches, and decades of industry experience. They regularly review the funds’ results and holdings to keep them aligned with their objectives.
AFIS funds are available in variable insurance products offered by:
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.
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. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks.
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. 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.
Investment allocations for funds of funds may not achieve fund objectives. There are expenses associated with the underlying funds in addition to fund-of-funds expenses. The funds' risks are directly related to the risks of the underlying funds, as described herein.
The Portfolio Series funds are monitored; allocations and funds may change.
Futures contracts may not provide an effective hedge of the underlying securities because changes in the prices of futures contracts may not track those of the securities they are intended to hedge. In addition, the managed risk strategy may not effectively protect the fund from market declines and will limit the fund's participation in market gains. The use of the managed risk strategy could cause the fund's return to lag that of the underlying fund in certain rising market conditions.
Past results are not predictive of results in future periods.
From September 1, 2004, through December 31, 2008, and for U.S. Government/AAA-Rated Securities Fund from July 1, 2010, through December 31, 2010, the series’ investment adviser waived a portion of its management fees. Investment results reflect the waivers, without which they would have been lower. Please see the funds’ most recent shareholder report or prospectus for details.