Jonathan Bell Lovelace believed that fundamental research is essential to achieving superior long-term investment results. The small company he founded in 1931 has grown into one of the world’s most respected financial institutions.
LOS ANGELES -- Capital Group, one of the world’s leading investment management firms, announced today that it has launched its new fixed-income fund, American Funds Strategic Bond Fund℠ (SBF). SBF takes a distinctive approach to multisector investing and will be benchmarked against the Bloomberg Barclays US Aggregate Index.
The fund’s strategy can be considered a flexible core-plus strategy, where investors have the potential to benefit from greater flexibility in changing interest rate environments. At the same time, the strategy will remain focused on achieving the fund’s total return objective and providing diversification to the equity market. The fund will invest at least 80% of its assets in bonds and other debt securities.
“We have been monitoring the multisector bond category for many years and have been managing this fund strategy internally since July 2013 so that we could feel certain of its potential to meet our investors’ objectives,” said Mike Gitlin, Head of Fixed Income at Capital Group.
The fund will seek to generate returns through multiple sources, including interest rate management and yield curve positioning. While the fund will have broad flexibility to invest in credit, significant reliance on credit, especially exposure from high yield securities, is less likely to be a characteristic of SBF. Capital Group believes that this approach can help the fund maintain low to negative correlation to the equity markets, thereby providing important portfolio diversification benefits.
“Many investment offerings in the non-traditional bond universe are highly correlated with the equity market due to significant high yield exposure,” noted Gitlin. “While credit will play a role in our Strategic Bond Fund strategy, there is a keen focus on the value we can add to clients through a rates perspective, as opposed to an over-reliance on sub-investment grade credit. We believe this is a key differentiator of Strategic Bond Fund.”
Portfolio managers David Hoag, Ritchie Tuazon and Damien McCann will manage the fund as a team using the research and risk management capabilities of Capital Group’s fixed-income group and broader organization.
“Capital Group is committed to offering our clients fixed-income strategies to meet their evolving investment needs,” added Gitlin. “We are very excited to offer our Strategic Bond Fund because it is another vehicle to help our clients better balance their portfolios and ultimately achieve their goals.”
Capital Group now has 17 bond funds available to investors.
About Capital Group
Since 1931, Capital Group has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. Today, Capital Group manages more than US $1.39 trillion in long-term equity and fixed-income assets for millions of individual and institutional investors around the world.*
The Capital Group companies manage equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.
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© 2016 American Funds Distributors, Inc.
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 mutual fund prospectuses and summary prospectuses, which can be obtained from a financial professional, and should be read carefully before investing. Similar information about collective investment trusts can be obtained from Capital Group or participants’ plan provider or employer.
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. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds.
The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional cash securities, such as stocks and bonds. The fund may engage in frequent and active trading of its portfolio securities, which may involve correspondingly greater transaction costs, adversely affecting the fund's results.
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.