The share classes differ based on how the financial professional is paid. Because different payment structures suit different investment needs, there are several pricing options for investment accounts, as well as CollegeAmerica® and ABLEAmerica® accounts.
Class A, 529-A and ABLE-A shares
Class C and 529-C shares
Effective June 30, 2020:
Class F-1, F-2, F-3, 529-F-1 and ABLE-F-2 shares
Refer to the fund’s prospectus for additional details.
This depends on several factors, including the amount you plan to invest and how long you expect to own your shares, among other things. Consult your financial professional for specific investment recommendations.
It depends on how you prefer to pay your financial professional, how much you invest and how long you expect to own the shares. You may want to talk to your financial professional before investing. They can offer advice and help you make decisions that fit your long-term financial plan.
Over shorter time frames, Class C and 529-C shares may cost slightly less than Class A and 529-A shares, if you don’t sell shares that incur a contingent deferred sales charge (CDSC).
With larger investments, Class A, ABLE-A and 529-A shares work to your advantage, since upfront sales charges decline the more you invest.
Class F-1 shares are available through certain financial service platforms. Class F-2, F-3, 529-F-1 and ABLE-F-2 shares are available through participating financial professionals. F share classes allow investors to access American Funds through a fee-based relationship with their financial professional. They do not carry an upfront sales charge or a CDSC but do carry slightly higher other expenses.
A CDSC is assessed on shares sold within a specified period. It is also known as a back–end load. The CDSC on American Funds Class C and 529-C shares is 1% and is assessed on certain withdrawals made within the first year of the investment.
The CDSC on Class A, 529-A and ABLE-A investments made without an upfront sales charge, due to having total assets of $1 million ($500,000 for certain funds) or more, is up to 1% on certain withdrawals occurring within 18 months of the investment.
The CDSC is based on the original investment amount or the current market value of the shares being sold, whichever is less. Shares that are not subject to a CDSC will be sold first, followed by the longest owned available shares.
Some exceptions may apply.
A breakpoint is the total value that your American Funds account(s) must have to qualify for a lower sales charge on Class A, 529-A and ABLE-A shares. The amount of your current investment is considered when determining the breakpoint at which the investment will be priced. If the value of all your accounts with American Funds (excluding direct investments to money market funds) exceeds a particular breakpoint, all subsequent investments will receive the reduced sales charge.
See Share Class Pricing Details – American Funds for additional breakpoint information.
Note: To receive a Class A, 529-A and ABLE-A sales charge reduction, you must tell your financial professional or Capital Group that you qualify for a reduction at the time you make an investment. If you fail to do so, you may not receive it.
If you notify Capital Group, you may reinvest money from a withdrawal, dividend payment or capital gain distribution back into the same account from which the money came without paying a sales charge, provided the reinvestment occurs within 90 days after the date of the transaction.
If the account from which the money came has been closed, you may reinvest the money into another account without a sales charge, provided:
If you are reinvesting money that represented a direct investment into a money market fund, into a non-money market fund, a sales charge will apply.
Refer to your financial professional or the fund’s prospectus for additional details.
“With sales charge” refers to the upfront sales charge applied to investments in Class A, 529-A and ABLE-A shares when purchased. The average annual total return “with sales charge” reflects the gain or loss made on an investment if the maximum 5.75% upfront sales charge was paid.
NAV, or “net asset value,” is the value of a fund share. This is the price you would receive for each share sold. NAV is calculated daily.
The average annual total return at NAV is the gain or loss made on an investment if you did not pay an upfront sales charge or a CDSC on the investment.
You can reduce the sales charge you pay on Class A, 529-A and ABLE-A share purchases by establishing an SOI. An SOI allows you to combine non-money market fund investments of all share classes that you intend to make over a 13-month period in order to determine the applicable sales charge for purchases made.
An SOI lets you take immediate advantage of the maximum quantity discount available, based on what you expect to invest.
Capital appreciation and reinvested dividends/capital gains do not apply toward your combined investments.
If you do not complete your statement of intention during the 13-month period, an additional sales charge will be due on the investment(s) made under the agreement. This additional sales charge represents the difference between the sales charge actually paid and the higher sales charge due, based on investments. Any adjustments will be reflected in an account confirmation and may result in corrected tax forms.
Special SOI rules apply to investors investing by payroll deduction. Please see the statement of additional information for details.
Contact your financial professional or contact us to establish an SOI.
There are several ways to reduce your sales charge on Class A, 529-A and ABLE-A investments, including:
Yes. Our rights of accumulation policy takes into account the current value of all existing Class F-1, F-2, F-3, A and C; Class 529-F-1, 529-A and 529-C; and Class ABLE-F-2 and ABLE-A share holdings in American Funds, as well as American Legacy® accounts established on or before March 31, 2007, to determine your Class A, 529-A and ABLE-A sales charge. Direct investments into the money market fund are excluded from rights of accumulation.
American Funds does not allow investments in Class C shares when Class A shares might be a more cost-effective option. This helps ensure you can take advantage of Class A share sales charge discounts. Class C share investors benefit from reduced sales charges available on Class A shares for investments of $500,000 or more, potentially making Class A shares a more cost–effective alternative for them.
Investors in Class 529-C shares may invest into their CollegeAmerica account until the balance (including any earnings) reaches $500,000.
Investors with aggregated American Funds accounts of $1 million or more can purchase Class A and 529-A shares at NAV and are ineligible for Class C and 529-C investments. For funds available at NAV based on aggregated assets of $500,000 or more, investors should purchase Class A or 529-A shares. Since the sales charge for Class A/529-A shares declines as investments and/or account values increase, Class A/529-A shares become the better option for larger investments held over a longer period.
Exchanges are generally only allowed within the same share class. However, you can exchange Class A shares in the American Funds U.S. Government Money Market Fund to Class C shares of most other funds. Also keep in mind that a sales charge may be applied if you are exchanging from Class A shares in the money market fund to another fund if those shares were not already subject to a sales charge.
For purposes of computing the CDSC, the length of time shares are owned will be measured from the date of the original investment and will not be affected by any exchanges.
Effective June 30, 2020, Class C shares automatically convert to Class A shares in the month of the eight-year anniversary of the investment. This is a nontaxable event that reduces the annual expenses you pay going forward. The new Class A share account will have the same registration as the C share account. A proportionate amount of dividends will be exchanged into the Class A share account.
Eligible Class 529-C shares will automatically convert to 529-A shares in the month of their five-year anniversary. This change ultimately benefits 529-C investors as they will incur lower 12b-1 expenses after the conversion.
In determining sales charges, your American Funds and American Legacy account values can be combined/aggregated with those of your spouse or spouse equivalent (if recognized by law) and children under 21 or disabled adult children with an ABLEAmerica account. Some exclusions may apply. Refer to a prospectus for details about the American Funds aggregation policy.
Direct investments into money market funds and American Legacy accounts established after March 31, 2007, cannot be aggregated.
If you gift shares from your account to another individual or organization, the current value of all your holdings with American Funds will be taken into account when determining the sales charge of your gift.
Note: To request a gift of shares to another individual, complete the Gift of Shares Request (PDF) or the Gift Transfer of Shares to a Charitable Organization (PDF) form.