LOS ANGELES, Aug. 1, 2016 /PRNewswire/ -- American Funds, a family of mutual funds from Capital Group, one of the world's largest investment management firms, announced today that it has launched two new fixed income funds, American Funds Corporate Bond FundSM and American Funds Emerging Markets Bond FundSM.
"Our newest bond funds will be managed in a disciplined way, based on rigorous research and a commitment to investor success that the American Funds have demonstrated over decades," said Mike Gitlin, Head of Fixed Income at Capital Group.
Corporate Bond Fund
Corporate Bond Fund will invest at least 80% of its assets in corporate bonds and will invest exclusively in investment-grade securities. It will be benchmarked against the Barclay's U.S. Corporate Investment Grade Bond Index. The fund may invest in debt securities issued by companies domiciled outside the United States, including issuers domiciled in developing countries. All securities held by the fund will be denominated in U.S. dollars.
"American Funds knows corporate bonds and we have been managing investments in this asset class for over 40 years," said portfolio manager David Lee. "In our Corporate Bond Fund, we are seeking out the best investment-grade opportunities for investors using a disciplined and research-driven approach."
Emerging Markets Bond Fund
Emerging Markets Bond Fund will invest at least 80% of its assets in securities of emerging markets issuers, including sovereign debt and debt of companies located in or with substantial business in emerging markets. The fund may also invest in debt securities with a wide range of maturities of any quality, which gives the fund the ability to pursue a high level of total return over the long term. The fund may invest up to 100% of its assets in securities denominated in currencies other than the U.S. dollar.
"For more than two decades, The Capital Group has been managing dedicated emerging markets debt strategies for institutional investors and today we are proud to offer these services more broadly," said Gitlin. "The portfolio managers on the fund, Robert Neithart, Laurentius Harrer and Kirstie Spence, each have more than 20 years of experience investing in EM debt – this level of experience is quite rare on one fund, much less a new fund."
American Funds now has 17 fixed income funds available to investors.
About Capital Group
Since 1931, Capital Group has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. Today, Capital Group manages more than US$1.39 trillion in long-term equity and fixed income assets for millions of individual and institutional investors around the world.*
*As of December 31, 2015
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.
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. The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. While not directly correlated to changes in interest rates, the values of inflation-linked bonds generally fluctuate in response to changes in real interest rates and may experience greater losses than other debt securities with similar durations. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. 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. The fund may engage in frequent and active trading of its portfolio securities, which may involve correspondingly greater transaction costs, adversely affecting the fund's results. The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional cash securities, such as stocks and bonds.
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SOURCE American Funds