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RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 1, 2 OR 754

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

Investing for income as rates and inflation rise

TODAY’S CHALLENGE

8.5% CPI in March 2022, highest since 1981*

High inflation and volatile bond markets underscore the challenge of finding durable income.

8.5% CPI in March 2022, highest since 1981*

1st in active taxable fixed income inflows in 2021

OUR STRATEGY

1st in active taxable fixed income inflows in 2021

Capital Group offers bond funds to help investors navigate today’s income problem. Our research-driven, active approach allows for allocations to shift based on market conditions and investment insights.

*Source: Bureau of Labor Statistics. 
Source: Morningstar. Year-to-date inflows based on month-end data through 12/31/21. The ranking reflects American Funds bond funds in comparison to other mutual fund and ETF managers. 

OUR TAKE

Opportunities exist. Rising rates could set the stage for higher yield and more income. 

For investors willing to add risk — allocations to multisector, high-yield or emerging markets debt funds to complement core funds can help provide durable income.

Income-seeking funds offered higher yields, complements core (F-2 shares)

The bar chart above shows the 12 month yields as of March 31, 2022 for six asset classes for F-2 shares. This includes: Morningstar Intermediate Core Bonds, Morningstar Intermediate Core-Plus Bonds, American Funds Multisector Income Fund, American Funds Emerging Markets Bond Fund, American High Income Trust, and American High Income Municipal Bond Funds. Morningstar Intermediate Core Bonds has a 12-month yield of 1.8%, Morningstar Intermediate Core-Plus Bonds has a 12-month yield of 2.1%, American Funds Multisector Income Fund has a 12-month yield of 3.8%, American Funds Emerging Markets Bond Fund has a 12-month yield of 6.0%, American High Income Trust has a 12-month yield of 4.7%, and American High Income Municipal Bond Funds has a 12-month yield of 5.3%.

*Tax-equivalent yield: Highest tax rate assumes the 3.8% Medicare tax and the top federal marginal tax rate for 2022 of 37%. Source: Morningstar. 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 fund: American Funds Multi-Sector Income Fund

American Funds Multi-Sector Income Fund invests across higher income sectors. The fund is designed to provide less volatility than a standalone high-yield or emerging markets debt fund, without meaningfully reducing income. 

 

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.

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 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 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.

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.

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 securities of individual issuers than a diversified fund. As a result, a single issuer could adversely affect a fund's results more than if the fund invested a smaller percentage of assets in securities of that issuer. See the applicable prospectus for details. (American Funds Emerging Markets Bond Fund)

There may have been periods when the results lagged the index(es). The indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.

This report, and any product, index or fund referred to herein, is not sponsored, endorsed or promoted in any way by J.P. Morgan or any of its affiliates who provide no warranties whatsoever, express or implied, and shall have no liability to any prospective investor, in connection with this report. J.P. Morgan disclaimer: https://www.jpmm.com/research/disclosures

Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively "Bloomberg"). Bloomberg or Bloomberg's licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg's licensors approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

When applicable, results reflect fee waivers and/or expense reimbursements, without which they would have been lower and net expenses higher. Please see capitalgroup.com for more information. Read details about how waivers and/or reimbursements affect the results for each fund. View results and yields without fee waiver and/or expense reimbursement.

  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. A portion of the fund's distribution may be classified as a return of capital. Please see 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 available at the time of publication.

Use of this website is intended for U.S. residents only. Use of this website and materials is also subject to approval by your home office.

American Funds Distributors, Inc., member FINRA.

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.

©2022 Morningstar, Inc. All Rights Reserved. Except for Lipper rating information, 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.

4. Certain share classes were offered after the inception dates of some funds. Results for these shares prior to the dates of first sale are hypothetical based on the original share class results without a sales charge, adjusted for typical estimated expenses. 

  • Class F-2 were first offered on 8/1/2008.
     

Results for certain funds with an inception date after the share class inception also include hypothetical returns because those funds' shares sold after the funds' date of first offering. View dates of first sale and specific expense adjustment information.

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.

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. High Yield Index 2% Issuer Cap, 30% Bloomberg U.S. Corporate 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.

The after-tax (or tax-equivalent) yield of a municipal bond investment is the yield a taxable bond would have to offer to equal the same amount as the tax-exempt bond.