FIXED INCOME

Comparing apples to oranges is over. Get more from the Core with The Bond Fund of America®.

THE BOND FUND OF AMERICA

The fund that has offered your Core, more.

Morningstar's bond fund category split is a game changer. 

Intermediate-term funds with less than 5% high yield exposure were recategorized as Core, while most others were moved to Core-Plus.

Now, investors and advisors can easily compare apples to apples. 

The Bond Fund of America is the largest actively managed fund in the new Intermediate Core Bond category.

The Bond Fund of America takes a true core approach that provides elements of all four roles of fixed income. It also reflects the four beliefs that we find essential to investor success: distinctive investing approach, fundamental research, a long-term view and partnership with financial advisors.

The Bond Fund of America can help client portfolios stay on track

Looking for resilience when stock markets are unsettled? The Bond Fund of America has delivered strong equity diversification. 

Cumulative returns during recent market corrections — Class F-2 (%)

This exhibit shows the six equity market correction periods during the current economic expansion. In each period the S&P500 index fell by 10% or more. For four of these periods, the Bond Fund of America returned between 0.9% and 3.4%. For one period it was flat, and for the other the return was slightly negative at -0.8%. Thus in each period the fund sharply outpaced the equity index, providing strong diversification.

The Bond Fund of America

Sources: Capital Group, Morningstar. As of 9/30/19.

The market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. Past results are not predictive of future results. Dates shown for market corrections are based on price declines of 10% or more (without dividends reinvested) in the unmanaged S&P 500 with at least 50% recovery persisting for more than one business day between declines. The returns are based on total returns. There have been periods when the fund has lagged the index, such as in rising equity markets.


The Bond Fund of America has outpaced the market over the past decade — delivering excess returns and outpacing passive strategies after fees.

Average annualized excess returns for The Bond Fund of America and passive peers (%)1

The exhibit shows the 3-, 5- and 10-year rolling period returns versus respective benchmarks for the Bond Fund of America and its passive peers in Morningstar's Intermediate Core Bond category. In each period the Bond Fund of America's annualized excess return was 0.45%, 0.39% and 0.77% respectively, while its passive peer average negative excess return was -0.39%, -0.38% and -0.40%, respectively.

Passive funds are not striving to outpace their benchmarks; rather, they seek to replicate the benchmark's return pattern.

Sources: Capital Group, Bloomberg Index Services Ltd., Morningstar. As of 9/30/19. All passive peers reflects all passive bond strategies in Morningstar's Intermediate Core category. 

Is your fixed income dominated by Core-Plus?
Your portfolio may be more vulnerable than you think.

Look at the late-2018 global selloff, for example. Now imagine what could happen in a much deeper correction, and the setback that may represent for your clients' long-term financial goals.

 

Eighty-seven basis points of excess return was provided by The Bond Fund of America over the Core-Plus category average during the global selloff period lasting from September 20, 2018 through December 24, 2018.

Read important investment disclosures

Excess return of The Bond Fund of America® over the Core-Plus average during the last correction

Sources: Capital Group, Morningstar. As of 9/30/19.

The market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. Past results are not predictive of future results. Fund's excess return over Morningstar Intermediate Core-Plus category average in most recent market correction (9/20/18-12/24/18) shown above. Excess returns for the five prior correction periods were: 22 bps (1/29/2018-2/8/2018); 123 bps (11/4/2015-2/11/2016); 60 bps (5/22/2015-8/25/2015); 111 bps (5/2/2011-10/3/2011); 29 bps (4/24/2010-7/2/2010). Dates shown for market corrections are based on price declines of 10% or more (without dividends reinvested) in the unmanaged S&P 500 with at least 50% recovery between declines. There have been periods when the fund has lagged the Core-Plus category average. 

Average annual total returns as of 9/30/19
  1 year 5 years 10 years
Standard & Poor’s 500 Composite Index 
4.25%
10.84%
13.24%
The Bond Fund of America (Class F-2)
9.57
3.26
4.01
Morningstar Intermediate-Term Core Bond Category Average 
9.35
2.95
3.59
Morningstar Intermediate-Term Core-Plus Bond Category Average
9.16
3.28
4.39

Want to learn more?

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Learn about the four key roles fixed income should play in a portfolio.

Fixed income at Capital Group

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1Respective rolling period excess returns shown over strategies' respective prospectus benchmark for passive peer groups net of fees from the Morningstar Intermediate Core category. Group of all passive peers includes passive Intermediate Core category strategies. Based on monthly data for the period 1/1/09 through 9/30/19. The number of rolling periods in 3-, 5-, and 10-year annual excess return timeframes were 94, 70 and 10, respectively. On January 1, 2009, The Bond Fund of America's strategy was repositioned from core plus to core fixed income, with its prospectus and guidelines adjusted accordingly.

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. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. View fund expense ratios and returns.

Returns shown at net asset value (NAV) have all distributions reinvested.

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.

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

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

Funds are managed, so holdings will change.

Investment results assume all distributions are reinvested and reflect applicable fees and expenses.

When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. 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.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

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.

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 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. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. 

Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. 

Class F-2 shares were first offered on August 1, 2008. Class F-2 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. 

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Standard & Poor’s 500 Composite Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2019 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. 

© 2019 Morningstar, Inc. All rights reserved. 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 nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.