We believe that objective-based portfolio construction, using flexible funds, provides better investor outcomes. Our philosophy places real-life goals front and center, and seeks to address a broader set of risk factors than traditional methods of portfolio construction.
The biggest risk to any portfolio is failing to meet the client’s goal. Traditional methods have their place, but an objective-based focus may help further address that risk and create better outcomes.
When you place client goals at the center of your thinking around risk, you can broaden your definition of risk itself — and create portfolios that help increase the chances for long-term success.
Objective-Based Investing Risk Factors
The foundation of our portfolio construction is the American Funds — equity investments with superior results over a number of periods and the flexibility to pursue objectives across asset classes and geography.
Our U.S.-Focused Equity Funds, on Average, Have a History of Outpacing the Market
Average returns for monthly rolling one-, three-, five- and 10-year periods for the 20 years ended December 31, 2016
Flexibility can deliver better results, as seen in this 20-year illustration where we’ve placed a combination of our flexible, objective–based funds up against a simple index blend and a fine-tuned style-box index blend.
Ending Value of Hypothetical $100,000 Investment Over 20 Years Ended March 31, 2017
From global growth to preservation, the American Funds model portfolios span the range of potential client goals and risk profiles, and are built by portfolio managers with decades of experience.
Guided by Objectives That Align With Goals-Based Wealth Management
Equity and Volatility Profile for the American Funds Model Portfolios Each of these models carefully weighs asset allocation against volatility in the pursuit of objectives.
F-3 Shares as of 3/31/17
1Since the inception date of the youngest underlying fund within the models.
These model portfolios can be a solution for some clients, or a starting point for others.
Our Portfolio Oversight Committee consists of seven portfolio managers with an average of 29 years’ investment experience. They collectively manage more than $90 billion in assets, and their knowledge of the underlying funds informs their portfolio construction efforts, supported by intensive research.
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.
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 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.
Income from municipal bonds may be subject to state or local income taxes and/or the federal alternative minimum tax. Certain other income, as well as capital gain distributions, may be taxable.
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.
Allocation percentages and underlying funds are subject to the Portfolio Oversight Committee's discretion and will evolve over time. Underlying funds may be added or removed at any time.
Returns are weighted averages of the results of unmanaged market indexes used to represent each model portfolio's investment categories. Returns assume reinvestment of all distributions and are not based on the returns of specific investments. Each strategy is rebalanced to its original target percentages annually.