Share class pricing and fund policy changes | Capital Group

Announcements

June 23, 2020

Share class pricing and fund policy changes

Effective June 30, 2020, several changes will be implemented to our share class pricing and conversion policies in order to align our approach with industry trends. These changes will result in lower costs to investors and align with the upcoming implementation of the SEC Regulation Best Interest (Reg BI).

They are as follows:

1) Modifications to municipal bond and short-term fixed income no-load Class A (NOLA) schedules

  • The NOLA breakpoint for municipal and short-term bond funds will lower from $1 million to $500,000.
  • The dealer payout for NOLA will lower from 1.00% to 0.75% for sales within the $500,000 to $10 million range.
  • For those funds with dealer commissions that are being reduced to 0.75%, the contingent deferred sales charge (CDSC) will be reduced from 1.00% to 0.75% to align with the new payout. The CDSC period will continue to be 18 months.

Class A share sales charge schedule

Funds included: Intermediate Bond Fund of America®, American Funds Inflation Linked Bond Fund®, Short-Term Bond Fund of America®, Limited Term Tax-Exempt Bond Fund of America®, American Funds Short-Term Tax-Exempt Bond Fund®, American Funds Preservation PortfolioSM, American Funds Tax-Exempt Preservation PortfolioSM

Amount of purchase

Former sales charge

New sales
charge

Former dealer commission
payout to firms

New dealer commission
payout to firms

At least $500,000 but less than $750,000

2.00%

0.00%

1.60%

0.75%

At least $750,000 but less than $1 million

1.50%

0.00%

1.20%

0.75%

At least $1 million but less than $4 million

0.00%

No change

1.00%

0.75%

At least $4 million but less than $10 million

0.00%

No change

No change

0.50%

$10 million and above

0.00%

No change

No change

0.25%

Class A share sales charge schedule

Funds included: American High-Income Municipal Bond Fund®, The Tax-Exempt Bond Fund of America®, The Tax-Exempt Fund of California®, American Funds Tax-Exempt Fund of New York®

Amount of purchase

Former sales
charge

New sales
charge

Former dealer commission

New dealer commission
payout to firms

At least $500,000 but less than $750,000

2.00%

0.00%

1.60%

0.75%

At least $750,000 but less than $1 million

1.50%

0.00%

1.20%

0.75%

At least $1 million but less than $10 million

0.00%

No change

1.00%

0.75%

At least $10 million but less than $25 million

0.00%

No change

No change

No change

$25 million and above

0.00%

No change

No change

No change

2) Sales charge modifications to Class 529-A and ABLE-A shares
The maximum offering price (MOP) for the following funds will decrease to 3.50%.

Class 529-A and ABLE-A sales charge schedules

Funds included: American Balanced Fund®, AMCAP Fund®, American Mutual Fund®, Capital Income Builder®, American Funds Developing World Growth and Income FundSM, EuroPacific Growth Fund®, Fundamental Investors®, American Funds Global Balanced FundSM, The Growth Fund of America®, American Funds Global Insight FundSM, The Investment Company of America®, The Income Fund of America®, International Growth and Income FundSM, American Funds International Vantage FundSM, The New Economy Fund®, New Perspective Fund®, New World Fund®, American Funds Conservative Growth and Income PortfolioSM, American Funds Moderate Growth and Income PortfolioSM, American Funds Growth PortfolioSM, American Funds Global Growth PortfolioSM, American Funds Growth and Income PortfolioSM, SMALLCAP World Fund®, Capital World Growth and Income Fund®, Washington Mutual Investors FundSM

Amount of purchase

Former sales charge

New sales charge

Less than $25,000

5.75%

3.50%

At least $25,000 but less than $50,000

5.00%

3.50%

At least $50,000 but less than $100,000

4.50%

3.50%

At least $100,000 but less than $250,000

3.50%

No change

Class 529-A and ABLE-A sales charge schedules

Funds included: American Funds Mortgage Fund®, American High-Income Trust®, The Bond Fund of America®, American Funds Corporate Bond Fund®, American Funds Emerging Markets Bond Fund®, U.S. Government Securities Fund®, American Funds Multi-Sector Income FundSM, American Funds Tax-Aware Conservative Growth and Income PortfolioSM, American Funds Strategic Bond FundSM, Capital World Bond Fund®

Amount of purchase

Former sales charge

New sales charge

Less than $100,000

3.75%

3.50%

Less than $250,000

3.50%

No change

Class 529-A share sales charge schedule

Funds included: American Funds College 2036, 2033, 2030, 2027, 2024, 2021 Funds

Amount of purchase

Former sales charge

New sales charge

Less than $100,000

4.25%

3.50%

Less than $250,000

3.50%

No change

3) Class 529/ABLE net asset value (NAV) rollover policy change
Investors may roll existing 529 and ABLE plans to American Funds Class 529-A and ABLE-A shares at NAV. All subsequent investments will be invested at the applicable breakpoint/sales charge. Any rollover investments processed by the fund’s transfer agent in Class 529-A and ABLE-A shares will be made at NAV regardless of the broker of record listed on the shareholder’s account.

Self-clearing firms who offer CollegeAmerica in a 529 omnibus environment aren’t obligated to implement this policy. If your firm decides to waive sales charges for 529 and ABLE rollover, specific language will be reflected in the fund prospectuses for your firm.

4) Class C/529-C share conversions
Class C shares: The current conversion timeline for Class C shares will be modified from ten years to eight years and convert Class C shares into Class A shares, as opposed to Class F-1 shares.

Class 529-C shares: The current conversion timeline for Class 529-C shares will be modified from ten years to five years. Shares will continue to convert into Class 529-A shares.

5) Financial Advisor terminology and Client Relationship Summary (CRS) language modifications
The term Financial Advisor will change to Financial Professional on investor confirmation, quarterly statements, checks, investor written communications and any necessary mailing inserts. Additionally, CRS language has been added to select American Funds account applications, including the financial advisor and client signature sections.

Please share this information with anyone in your office who assists you.


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, summary prospectuses, CollegeAmerica Program Description and ABLEAmerica Program Description which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica and ABLEAmerica are distributed by American Funds Distributors, Inc. and sold through unaffiliated intermediaries. 

Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits not available through CollegeAmerica (such as financial aid, scholarship funds and protection from creditors) or ABLEAmerica. Before investing in any state's 529 plan, investors should consult a tax advisor. 

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.

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.