Fund tilted toward higher quality sectors
Monthly allocations since fund inception (March 22, 2019)
TODAY’S CHALLENGE
Federal funds target rate: 3.75 - 4.00%*
Steady rates and a cautious Federal Reserve create a need for careful positioning in fixed income.
Federal funds target rate: 3.50 - 3.75%*
OUR STRATEGY
50+ years of fixed income investing
Capital Group offers bond funds to help investors generate meaningful income. Our research-driven, active approach allows for fund allocations to shift based on market conditions and our investment insights (subject to fund guidelines).
*Source: The New York Federal Reserve. As of 6/30/26.
OUR TAKE
Opportunities for high income should continue if the U.S. economy maintains positive gross domestic product (GDP) growth.
For investors willing to add risk, allocations to multi-sector, high-yield or emerging markets debt funds can complement core funds and help provide income.
Income-seeking funds offered higher distribution rates, complemented core (F-2 shares)
*Tax-equivalent 12-month distribution rate: Highest federal tax rate assumes the 3.8% net investment income tax and a 37% top federal marginal tax rate for the current tax year, for a total federal tax rate of 40.8%. Morningstar Intermediate Core Bond and Morningstar Intermediate Core-Plus Bond are category averages. Sources: Morningstar and Bloomberg.
American Funds Multi-Sector Income Fund (F-2)
MIAYX
American High-Income Trust (F-2)
AHIFX
American Funds Emerging Markets Bond Fund (F-2)
EBNFX
American High-Income Municipal Bond Fund (F-2)
AHMFX
Featured platform: Multi-sector income
Capital Group’s Multi-Sector Income platform seeks less volatility than a standalone high-yield or emerging markets debt fund while maintaining a level of high income.
- Elevated income
- Sector selection
- Yield dispersion
- Building income
- Risk-return
- Diversification
A multi-sector approach can help boost income prospects
Strategic allocations to sectors such as high yield, investment-grade (BBB/Baa and above) corporates, emerging markets debt and securitized credit are combined into a single portfolio. These sectors’ unique return drivers and correlations can seek a high level of income and risk-adjusted returns.
American Funds Multi-Sector Income Fund →
CGMS (Capital Group U.S. Multi-Sector Income ETF) →
Capital Group KKR Multi-Sector+ →
Source: Capital Group. As of 6/30/2026.
American Funds Multi-Sector Income Fund
- Positioning
- Strategy
Opportunistic includes U.S. Treasuries, municipal bonds, noncorporate credit and other debt instruments. Securitized includes financial securities that are created by securitizing individual loans (debt). Source: Capital Group. Data as of 6/30/26. Investment-grade = BBB/Baa rated and above.
Overweight
Securitized
In securitized markets, the fund maintained its core positioning in commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS), but reduced exposure throughout the period, specifically within CMBS. CMBS positioning continued to favor single-asset/single-borrower (SASB) structures with stronger collateral support, while ABS exposure remained focused on sectors with more stable underlying consumer fundamentals. Overall, the portfolio’s securitized allocations are used to help generate income and help provide capital preservation.
Investment-grade credit
Within investment-grade (IG) corporates, we reduced exposure modestly in the middle of the period and selectively added to exposure in idiosyncratic opportunities at the issuer or security level. The fund also maintained or modestly increased exposure in more defensive and higher-quality areas such as financials and select health care issuers. Technology exposure remained selective, focused on issuers with strong margins and resilient cash flow profiles. Overall, the portfolio’s IG mix shifted toward higher-conviction, fundamentally resilient industries.
Underweight
High yield
The fund increased its overall allocation to high-yield credit early in the quarter, moving from a more cautious stance to more constructive positioning as volatility created opportunity. A combination of cash holdings and the use of high-yield credit default swap indexes (CDX) drove this increase. As spreads normalized later in the period, the fund reduced exposure to high-yield bonds, primarily through CDX exposure. The fund remained underweight high yield relative to the benchmark.
Emerging markets
Within emerging markets debt (EMD), we modestly increased exposure through a rotation into higher-yielding segments and specific country opportunities, rather than a broad-based increase. The fund added to its high-yield EMD positions, with exposure in select Latin American credits, where spreads and fundamental trajectories appeared more attractive. This reflected a targeted approach focused on country-level relative value, emphasizing regions with stronger carry and improving fundamentals, while trying to avoid areas where spreads remained tight relative to risk.
Weightings are relative to the American Funds Multi-Sector Income Fund Custom Index. As of 6/30/26.
Featured fund: American High-Income Trust
A diversified portfolio of lower rated, higher yielding bonds seeking to provide investors a high level of current income.
Fund is slightly defensively positioned
Industries shown below are among the fund's notable overweights and underweights relative to the index
Sources: Capital Group, Bloomberg. Data as of 6/30/26.
Overweight
REITs
Our American High-Income Trust maintained a modest overweight to real estate investment trusts (REITs) through select issuers due to their strong fundamentals, including resilient free cash flow and REITs' generally stable leverage profile. These assets offer defensive yields and diversification potential.
Brokerage, asset managers & exchanges
Financial advisory platforms are growing via consolidation and should benefit from elevated interest rates. Investments across the industry have produced an attractive level of cash flow despite recent regulatory concerns.
Underweight
Consumer cyclical
Although the fund remained broadly underweight the industry, we maintained idiosyncratic positions in retailers, gaming and leisure. These investments skewed toward higher quality issues within these industry groups.
Capital goods
In our view, the fundamental outlook is stable across industries like diversified manufacturing. The largest underweight within the sector came from building materials, which have been impacted by decreasing home sales in recent years.
Weightings are relative to the Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index as of 6/30/26.
Some say
Credit sector spreads are historically tight.
Insight
While most credit spreads are tight on a historical basis, many starting yields are near or above their five-year average. Even if the Fed raises rates later in 2026, we believe income-oriented sectors can effectively complement a core bond allocation.
In our view, high yield, emerging markets bonds, investment-grade corporates and other sectors can potentially enable income investors to achieve long-term excess returns even if the federal funds target rate holds steady.
Some say
Investors only need dividend-paying stocks to generate income.
Insight
In addition to dividend-paying stocks, investments in higher income bonds can help income-seeking investors fund a longer retirement. Higher income bonds include investment-grade and high-yield corporates, emerging markets and securitized debt.
In addition to diversification, most of these bonds offer steady coupon payments. However, they also carry the risk of defaulting on their obligations. Depending on their objectives, income-seeking investors may want to consider allocating a portion of their investments to these assets.
Some say
Current high-yield spreads are tight versus their historical average.
Insight
While it’s natural for fixed income investors to be concerned with tight spreads, indicators such as starting yield to worst (YTW)4, credit quality and the likely direction of U.S. corporate earnings suggest that high yield may continue to outpace other fixed income sectors in 2026. With a starting YTW of 7.16% and with more than 50%* of the high-yield market rated BB/Ba, we believe high yield can continue to complement a core bond allocation and potentially offer greater long-term income than dividend-paying stocks.
Source: Bloomberg. Data as of 6/30/26. *Based on the Bloomberg U.S. High Yield 2% Issuer Capped Index.
Some say
Only speculative investors should buy emerging markets debt.
Insight
Emerging markets bonds can offer high income with currency and geographic diversification. Many emerging markets sovereign bonds are investment-grade-rated, and the sector includes some of the fastest growing economies in the world.
Still, idiosyncratic and geopolitical risks tied to emerging markets are real, and we believe a capable investment manager with disciplined risk-management processes in place is essential for investors to achieve long-term success.
Some say
Municipal bonds are only for wealthy investors.
Insight
Investors across multiple tax brackets can benefit from allocations to municipal bonds. Munis are typically exempt from federal taxes and sometimes state and local taxes, which means that investors can keep more of their interest income.
Beyond tax advantages, munis typically have lower credit risk compared to high-yield bonds and equities. They can also serve to diversify a portfolio.
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. Investing for short periods makes losses more likely. Prices and returns will vary, so investors may lose money. View mutual fund expense ratios and returns. View current mutual fund SEC yields and tax-equivalent SEC yields.
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 interval fund prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
This and other important information is contained in the mutual 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 use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds.
Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds.
The return of principal for bond portfolios and portfolios with significant underlying bond holdings is not guaranteed. Investments are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings.
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.
For Public-Private+ Funds:
Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+ are interval funds that currently provides liquidity to shareholders through quarterly repurchase offers of up to 10% of its outstanding shares.
To the extent a higher percent of outstanding shares are tendered for repurchase, the redemption proceeds are generally distributed proportionately to redeeming investors (“proration”). Due to this repurchase limit, shareholders may be unable to liquidate all or a portion of their investment during a particular repurchase offer window. In addition, anticipating proration, some shareholders may request more shares to be repurchased than they actually wish, increasing the likelihood of proration. Shares are not listed on any stock exchange, and we do not expect a secondary market in the shares to develop. Due to these restrictions, investors should consider their investment in the fund to be subject to illiquidity risk.
- Investment strategies are not guaranteed to meet their objectives and are subject to loss. Investing in the fund is not suitable for all investors. Investors should consult their investment professional before making an investment decision and evaluate their ability to invest for the long term. Because of the nature of the fund's investments, the results of the fund's operations may be volatile. Accordingly, investors should understand that past performance is not indicative of future results.
- Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.
- Illiquid assets are more difficult to sell and may become impossible to sell in volatile market conditions. Reduced liquidity may have an adverse impact on the market price of such holdings, and the fund may be unable to sell such holdings when necessary to meet its liquidity needs or to try to limit losses, or may be forced to sell at a loss. Illiquid assets are also generally difficult to value because they rarely have readily available market quotations. Such securities require fair value pricing, which is based on subjective judgments and may differ materially from the value that would be realized if the security were to be sold. Situations involving uncertainties as to valuation of assets held by the fund could have an adverse effect on the returns of the fund.
- The fund is a nondiversified fund that has the ability to invest a larger percentage of assets in the securities of a smaller number of issuers than a diversified fund. As a result, poor results by a single issuer could adversely affect fund results more than if the fund were invested in a larger number of issuers.
For Public-Private Credit+ Funds:
- Bond investments may be worth more or less than the original cost when redeemed. High‐yield, lower‐rated, securities involve greater risk than higher‐rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not.
- The funds may invest in structured products, which generally entail risks associated with derivative instruments and bear risks of the underlying investments, index or reference obligation. These securities include asset-based finance securities, mortgage-related assets and other asset-backed instruments, which may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market's perception of issuer creditworthiness; while generally supported by some form of government or private guarantee, there is no assurance that private guarantors will meet their obligations.
- 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. The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds.
- The fund invests in private, illiquid credit securities, consisting primarily of loans and asset-backed finance securities. The fund may invest in or originate senior loans, which hold the most senior position in a business's capital structure. Some senior loans lack an active trading market and are subject to resale restrictions, leading to potential illiquidity. The fund may need to sell other investments or borrow to meet obligations. The funds may also invest in mezzanine debt, which is generally unsecured and subordinated, carrying higher credit and liquidity risk than investment-grade corporate obligations. Default rates for mezzanine debt have historically been higher than for investment-grade securities. Bank loans are often less liquid than other types of debt instruments and general market and financial conditions may affect the prepayment of bank loans, as such the prepayments cannot be predicted with accuracy.
- Investment strategies are not guaranteed to meet their objectives and are subject to loss. Investing in the fund is not suitable for all investors. Investors should consult their investment professional before making an investment decision and evaluate their ability to invest for the long term. Because of the nature of the fund's investments, the results of the fund's operations may be volatile. Accordingly, investors should understand that past performance is not indicative of future results.
- Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.
- Illiquid assets are more difficult to sell and may become impossible to sell in volatile market conditions. Reduced liquidity may have an adverse impact on the market price of such holdings, and the fund may be unable to sell such holdings when necessary to meet its liquidity needs or to try to limit losses, or may be forced to sell at a loss. Illiquid assets are also generally difficult to value because they rarely have readily available market quotations. Such securities require fair value pricing, which is based on subjective judgments and may differ materially from the value that would be realized if the security were to be sold. Situations involving uncertainties as to valuation of assets held by the fund could have an adverse effect on the returns of the fund.
- The fund is a nondiversified fund that has the ability to invest a larger percentage of assets in the securities of a smaller number of issuers than a diversified fund. As a result, poor results by a single issuer could adversely affect fund results more than if the fund were invested in a larger number of issuers.
For Public-Private Credit+ Funds:
- Bond investments may be worth more or less than the original cost when redeemed. High‐yield, lower‐rated, securities involve greater risk than higher‐rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not.
- The funds may invest in structured products, which generally entail risks associated with derivative instruments and bear risks of the underlying investments, index or reference obligation. These securities include asset-based finance securities, mortgage-related assets and other asset-backed instruments, which may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market's perception of issuer creditworthiness; while generally supported by some form of government or private guarantee, there is no assurance that private guarantors will meet their obligations.
- 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. The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds.
- The fund invests in private, illiquid credit securities, consisting primarily of loans and asset-backed finance securities. The fund may invest in or originate senior loans, which hold the most senior position in a business's capital structure. Some senior loans lack an active trading market and are subject to resale restrictions, leading to potential illiquidity. The fund may need to sell other investments or borrow to meet obligations. The funds may also invest in mezzanine debt, which is generally unsecured and subordinated, carrying higher credit and liquidity risk than investment-grade corporate obligations. Default rates for mezzanine debt have historically been higher than for investment-grade securities. Bank loans are often less liquid than other types of debt instruments and general market and financial conditions may affect the prepayment of bank loans, as such the prepayments cannot be predicted with accuracy.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.
Nondiversified funds have the ability to invest a larger percentage of assets in the securities of a smaller number of issuers than a diversified fund. As a result, poor results by a single issuer could adversely affect fund results more than if the fund invested in a larger number of issuers. See the applicable prospectus for details.
There have been periods when the results lagged the index(es) and/or average(s).
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KKR serves as the sub-adviser of Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+ with respect to the management of each fund's private credit assets.
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This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.
For CGMS: The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. The return of principal for bond portfolios with significant underlying bond holdings is not guaranteed. Investments are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Investing outside of the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.
Investments in mortgage-related securities such as CGMS involve additional risks, such as prepayment risk.
1. The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the fund’s SEC yield and distribution rate may differ. For American Funds Emerging Markets Bond Fund, a portion of the fund's distribution may be classified as a return of capital. Please refer to the fund's Annual Report for details.
2. Calculated by Morningstar. Due to differing calculation methods, the figures shown here may differ from those calculated by Capital Group.
3. Expense ratios are as of each fund’s prospectus/characteristics statement, as applicable, available at the time of publication.
4. Yield to worst is defined as the lowest possible yield that an investor would receive if all the issuers in a fixed income fund fulfilled their payment obligations.
© 2026 Morningstar, Inc. All Rights Reserved. Some of the information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar, its content providers nor Capital Group are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Information is calculated by Morningstar. Due to differing calculation methods, the figures shown here may differ from those calculated by Capital Group.
Duration indicates a bond fund’s sensitivity to interest rates. Higher duration indicates more sensitivity.
Sharpe ratio uses standard deviation and excess return to determine reward per unit of risk. The higher the number, the better the portfolio's historical risk-adjusted performance.
Annualized standard deviation (based on monthly returns) is a common measure of absolute volatility that tells how returns over time have varied from the mean. A lower number signifies lower volatility.
Correlation to S&P 500 is a measurement of how returns for the fund and S&P 500 move in relation to each other. A correlation ranges from -1 to 1. A positive correlation close to 1 implies that as one moved, either up or down, the other moved in “lockstep,” in the same direction. A negative correlation close to -1 indicates the two have moved in the opposite direction.
Bloomberg U.S. Corporate Investment Grade Index represents the universe of investment grade, publicly issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. This index is unmanaged, and its results include reinvested distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index covers the universe of fixed-rate, non-investment-grade debt. The index limits the maximum exposure of any one issuer to 2%. This index is unmanaged, and its results include reinvested distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
American Funds Multi-Sector Income Fund Custom Index comprises: 45% Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index, 30% Bloomberg U.S. Corporate Investment Grade Index, 15% J.P. Morgan EMBI Global Diversified Index, 8% Bloomberg CMBS Ex AAA Index, 2% Bloomberg ABS Ex AAA Index and blends the respective indices by weighting their cumulative total returns according to the weights described. This assumes the blend is rebalanced monthly.
J.P. Morgan Emerging Market Bond Index (EMBI) Global Diversified is a uniquely weighted emerging market debt benchmark that tracks total returns for U.S. dollar-denominated bonds issued by emerging market sovereign and quasi-sovereign entities. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of account fees, expenses or U.S. federal income taxes.
J.P. Morgan CEMBI Broad Diversified Index tracks the performance of US dollar-denominated bonds issued by emerging market corporate entities.
JP Morgan Government Bond Index – Emerging Markets Global Diversified covers the universe of regularly traded, liquid fixed-rate, domestic currency emerging market government bonds to which international investors can gain exposure. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of account fees, expenses or U.S. federal income taxes.
Bloomberg CMBS Ex AAA Index: tracks investment-grade (Baa3/BBB- or higher, excluding Aaa/AAA) commercial mortgage backed securities that are included in the Bloomberg U.S. Aggregate Index. These securities have a minimum life of at least one year and must be fixed-rated weighted average coupon or capped weighted average coupon securities.
Bloomberg ABS Ex AAA Index: covers fixed-rated investment-grade (Baa3/BBB- or higher, excluding Aaa/AAA) asset backed securities that are included in the Bloomberg U.S. Aggregate Index. The index has three subsectors, which includes credit and charge cards, autos, and utility. These securities are ERISA-eligible and must have an average life of at least one year and must be senior class, tranche B or C of the deal.