Lower breakpoints expected to save over $20 million for investors in first year
LOS ANGELES, May 2, 2022 /PRNewswire/ — Capital Group, home of American Funds, is reducing fees on 18 funds by revising initial fee breakpoints. The change applies to funds with current assets of less than $15 billion, resulting in a potential for over $20 million in savings for investors within the first year of the change.
Capital Group has a history of being a low-cost active manager. As of May 1, 93 percent of the company’s fund management fees are expected to sit in the lowest quintile of fees within its peer group, versus 84 percent as of March 31, 2022¹.
“Over the past several years, our business has continued to grow as more and more investors appreciate the value our global team of investment professionals brings to our strategies,” said Mike Gitlin, member, Capital Group management committee. “At Capital, we have a long history of sharing the benefits of scale with our fund shareholders through lower fees. Small differences in investment outcomes – just a few basis points – can compound over a lifetime and drive vastly different experiences for people.”
Many of the funds positively affected by this change are Capital Group’s fixed income funds. Fixed income continues to be a strong growth area for Capital Group with assets under management more than doubling in the last five years and now just shy of $500B. Of the 11 fixed income funds with five year track records that will see lower fees, 9 are in the top two quartiles for results (or 82%). American Funds Multi-sector Income Fund, Capital Group’s newest bond fund which will also see lower fees, has a three year track record with results in the highest quartile. A total of 12 bond funds will experience reduced fees.
Funds affected by this change include:
|Fixed Income Funds||New
|American Funds Corporate Bond Fund||0.25%||0.36%|
|American Funds Emerging Markets Bond Fund||0.46%||0.55%|
|American Funds Multi-Sector Income Fund||0.33%||0.42%|
|American Funds Strategic Bond Fund||0.28%||0.30%|
|American Funds Mortgage Fund||0.18%||0.19%|
|Short-Term Bond Fund of America||0.25%||0.26%|
|American Funds Inflation-Linked Bond Fund||0.25%||0.26%|
|American Funds Short-Term Tax-Exempt Bond Fund||0.20%||0.33%|
|American Funds Tax-Exempt Fund of New York||0.24%||0.29%|
|American Funds Tax-Exempt Fund of California||0.23%||0.26%|
|Limited Term Tax-Exempt Bond Fund of America||0.18%||0.20%|
|American High-Income Municipal Bond Fund||0.24%||0.25%|
|American Funds International Vantage Fund||0.48%||0.60%|
|American Funds Developing World Growth & Income Fund||0.65%||0.73%|
|American Funds Global Insight Fund||0.41%||0.42%|
|Capital Group Funds|
|Capital Group Emerging Markets Growth Fund||.62%||.76%|
|American Funds Insurance Series|
|VI Ultra Short Bond Fund||0.26%||0.32%|
|VI International Fund||0.48%||0.49%|
“Every day we think about how we can achieve superior investment results for our clients over the long-term,” said Gitlin. “Consistent active management and lowering fees on our smaller mutual funds both help us deliver on our commitment.”
About Capital Group
Capital Group, home of the American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability since 1931.
As of December 31, 2021, Capital Group manages more than $2.7 trillion in equity and fixed income assets for millions of individual and institutional investors around the world. Capital Group manages 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.
For more information, visit capitalgroup.com.
Hannah Coan, Capital Group
Tel: (213) 615-5199
Sarah Christiansen, Capital Group
Tel: (213) 615-3052
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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.
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- Management fee rank totals are for American Funds, American Funds Insurance Series Funds, and Capital Group Emerging Markets Growth Fund. Fee rank totals are based on each fund’s Morningstar category; exclude index funds and funds of funds; and are filtered for the least expensive share class per offering as of 3/31/2022. American Funds Insurance Series Funds ranks utilize the net management fee, including any disclosed management fee waivers in the prospectus. For more information on each fund’s fees, see the latest prospectus.
- As of May 1, 2022.
- As of each fund’s prospectus available at the time of publication.
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SOURCE Capital Group Companies